CHINA: New Insurance Rules Implemented from 2003
New Regulation Issued to Facilitate Enterprise Restructuring
Hu Jintao Stresses Need to Re-employ Laid-off Workers
China to Speed Up Urbanization
Retired Aide to Mao Calls for Progress to Democracy
China Drafts Venture Capital Law
WTO: Draft Law to Balance Protection and Compliance
China Blocks Internet 'Blog' Site
China Issues Rules on Foreign Debt Management
More Laws Supporting Agricultural Development
China to Step Up Enforcement of Industrial Safety Law
China's Securities Watchdog Vows to Brace Market Regulations
FM Spokeswoman on China's Anti-Terrorism Stance
Media Sector Opened Wider
JAPAN: Okuda Offers Economic Solution: Substantially Raise Sales Tax
Koizumi Vows to Realize Reforms in 2003
Russia and Japan Sign Accord to Seek End to Dispute over Islands
State Eyes Cutting Tax Breaks for Richer Pensioners
Carves Out New Military Role
Deregulation Rules Proposed
Japan to Cut Contribution to the Budget of the U.N.
Tokyo Sees a Bold New Vision for Its Foreign Policy
New Privacy Bill Unshackles Media
SOUTH KOREA: Seoul Selects 10 New Technologies
Fewer Babies, Migrating Couples Lead Local Government to Offer Cash in Hand
Ministry to Ban Mobile Signal Jammers
Regulators to Crack Down on VDSL Marketing
Chinese Characters to Be Replaced in Legal Codes
'No Shock Therapy' on Chaebol Reform
Roh, Business Community Clash over Chaebol Policy
N. Korea Withdraws from NPT
President-elect to Start Receiving Policy Briefings Jan. 20
Roh to Move Forward with Political Reform First
Gov't Checks Inflation Ahead of Lunar New Year Holiday
Seoul Plans Policy to Keep Urban Areas Green
Economic Blueprints for Roh Administration Drawn Up
First Plenary of 9th Inter-Korean Ministerial Talks Ends
Koreas Agree to Seek Peaceful End to Nuke Crisis
Outdated Laws Stifle Financial Firms

BANGLADESH: PM Declares 2003 as 'Good Education Year'
Bill on ICT to Be Placed in JS
INDIA: Vajpayee Gets Control of N-Command System
Broadcasting Council Bill to Be tabled in Parliament
2003 Should Be 'Year of Action': Kalam
India Determined to Fight Terrorism in All Its Forms: Mahajan
Kalam Asks India Inc to Raise Contribution in GDP
SRI LANKA: PM Nominated Sri Lankan of the Year
Three Labour Bills Tomorrow
Government Will Mobilise Local, Global Resources to Develop Lanka - FM
PAKISTAN: Amendment in Local Govt. Ordinance 2001
Law, Order Moot
Musharraf Heads Pak's Nuclear Command
Pakistan's Commitment to Reforms Satisfies IMF

ARMENIA: Minister Registers Armenia's Foreign-Policy Progress in 2002
GEORGIA: Georgian Security Official Envisages Nato Membership in 2006
IRAQ: U.S. is Completing Plan to Promote a Democratic Iraq
KYRGYZSTAN: Kyrgyzstan Extends Moratorium on Death Penalty
Kyrgyzstan: Constitutional Referendum Culminates Five Months of Heated Debate
Kyrgyz Government Hints That Constitutional Amendments Might Be Revised...
KAZAKHSTAN: Updating Kazakhstan's Education Sector Strategy
Experts See Limited Progress in Kazakhstan’s Aids Policy
President's Statement on Democracy and Market
TAJIKISTAN: 'Not Ready' to Abolish Capital Punishment
TURKMENISTAN: Adopts New Election Law
UZBEKKISTAN: Government Tightens Antismuggling Measures
Uzbekistan Blocks Access to Internet Defamation of President

CHINA: Hong Kong to Hike Taxes, Cut Bureaucracy
Hong Kong's Leader Cuts His Pay in 'Hard Times'
Hu Girds for Political Reform
China's New Leader Consolidates Power
More Chinese in Non-state Economy Participate in Politics
JAPAN: Tasks for the Newly Opened Diet
Gov't Fails to Disclose 127 Documents Despite Disclosure Law
SOUTH KOREA: Former Secretary General of SPPO Was Designated as a Citizen Ombudsman
North Korea Defends Decision to Re-Start Nuclear Program
Roh's New Staff-Appraisal System Perceived as Double-edged Sword
President-Elect Names Chief of Staff
Presidential Office Begins to Transfer Records to Government Archives
Civic Group Proposes Anti-Corruption Agency
Selection of Cho Hung Bidder May Be Delayed
Goh Kun Named as Future PM by South Korean President-elect
The Two Koreas Open Cabinet-Level Talks
Public Servants May Get Labor Union

UZBEKISTAN: Educational Reform Stalls on Corruption, Inefficiency
Former Armenian Foreign Minister Barred from Presidential Election
Armenian President Anticipates First-Round Election Victory
KAZAKSTAN: Dissident's Wife Defeated in Kazakh By-election
Kazakh Opposition Politician Named Presidential Aide
TAJIKISTAN: Governing Opposition
Senior Tajik Official Sentenced for Polygamy
TURKISH: Party Leader Seeks Favor in Central Asia
TURKMENISTAN: Former Turkmen Foreign Minister Sentenced to Life Imprisonment
Turkmenistan: President Calls Early Parliamentary Elections
ARMENIAN: Presidential Aide Named to Head Public TV and Radio

CHINA: China to Launch CPA Rotating System
Government Adopts Active IT Outsourcing Strategy
Auditors to Keep Eye on State Companies
China's Asset Management Corporations Improve Efficiency
JAPAN: Ministry Pushing Home Power-Saving Unit
Ministry to Subject Teachers to Performance-Linked Pay
SOUTH KOREA: CEOs Advised to Adopt Ethical Management
CEOs Advised to Adopt Ethical Management
Korea Streamlines Mobile Access Code
MONGOLIA: Mongolian Workers Under New Management in Korea

BANGLADESH: Govt to Establish Transparency in All Sectors: Mannan
INDIA: Vajpayee Tags Poverty-Free India to Urgent Reforms
PM Calls for Change in Education System for Faster Development
Multipurpose I-Card Scheme from April 1
Be Proactive-- Vajpayee Tells Governors
SRI LANKA: Prime Minister Moots Setting Up Unemployment Insurance Scheme
President, PM Discuss National Issues
PAKISTAN: Govt to Equally Develop All Areas of the Province
Government to Attack Poverty Effectively
New Directions Given to NRB
Govt Working to End Unemployment from the Country

2003 APEC Themes: Security & Economic Development Regardless of Differences

The theme and sub-themes for the 2003 APEC year have been released by the host economy, the Kingdom of Thailand. The central theme of the 2003 APEC year is: "A World of Differences: Partnership for the Future" The incoming Executive Director of the APEC Secretariat for the 2003 APEC year, Ambassador Piamsak Milintachinda, said the 2003 theme is most suitable for the current regional economic climate. "Many of the challenges confronting the APEC region today do not respect borders or cultural differences. "To meet the challenges of economic instability, corporate governance and terrorism, we must build on our strengths to work together. "The terrorists behind acts in Russia, the Philippines and Indonesia did not discriminate between cultures and community identities. We must work together in pursuit of APEC’s twin goals of enhancing security against terrorist threats while continuing to promote trade growth and economic development within the APEC region. "Working in partnership we can also reduce the cost of doing business across borders and expand the benefits of new technologies and skills to all members of APEC. "By drawing strength from our differences and working in partnership we can set common standards and regulations that all economies will observe and respect. Building greater uniformity of standards and regulations makes it easier for small and medium sized business to trade across borders and ultimately creates jobs. "Regardless of their level of economic development, resources and financial strength, all APEC economies must forge a sense of strong partnership to foster regional economic growth." Ambassador Piamsak said the main theme of the 2003 year is supported by a series of sub-themes that will assist APEC Working Groups and Forums to better articulate their goals for the year. These themes are listed on the attached fact sheet.

From http://www.apecsec.org.sg/ 12/13/2002

Asia Hopes for a More Peaceful 2003

SYDNEY, Australia -- Tight security and pleas for peace after a tumultuous 12 months have marked the welcoming of the New Year across the Asia Pacific region. The changeover was relatively trouble free, although a deadly grenade attack in the Philippines and anti-U.S. protests in Seoul, South Korea marred the celebrations. Six people were killed instantly when someone hurled a grenade into a fireworks stand in the city of Tacurong in Sultan Kudarat province Tuesday evening, Philippine police said. Thirty-two people were wounded in the attack, Philippine police spokesman Franco Lustino said. No one has taken responsibility for the attack but police blame the Moro Islamic Liberation Front. In downtown Seoul, at least 20,000 South Koreans gathered in a candlelight demonstration to protest the deaths of two teenage girls killed when they were hit by a U.S. military jeep. The protesters set off fireworks, some chanting, "Punish the murderous American soldiers!" Adding to the sentiment, South Korean president-elect, Roh Moo-hyun, in a New Year's message, warned against "blindly following U.S. policy," on North Korea. Roh criticized a possible U.S. plan to use economic sanctions to force North Korea to abandon nuclear weapons development, asserting his country's role in resolving the looming nuclear crisis on the Korean Peninsula. In Sydney, Australia, the word "Peace" blazed over the harbor at the climax of a 15-minute display watched by hundreds of thousands of people. Police closed downtown Sydney to traffic in a massive security clampdown rivaled only by the city's 2000 Olympics. "After ... all this talk about terrorism it is so good that Australians overcame adversity," Sydney Lord Mayor Frank Sartor said after the fireworks, The Associated Press reported. "We went on and celebrated and had a great, great party." In New Zealand's largest city Auckland, fireworks erupted from the 330 meter (1,076 foot) Sky Tower on the stroke of midnight while crowds cheered on the streets below. Skydivers made for an impressive sight in Kuala Lumpur, Malaysia, jumping from the world's highest buildings, the Petronas Towers, to mark the beginning of 2003. Pacific Rim nations have been on heightened alert since October 12, when bombs tore through two nightclubs on the Indonesian island of Bali, killing 192. The victims were mostly Western vacationers, including 88 Australians. The blasts are blamed on Jemaah Islamiyah, a group linked to Osama bin Laden's al Qaeda terrorist network. More than 200,000 security personnel were on duty across the world's most populous Islamic nation. In the capital, Jakarta, bomb squad officers and armed officers were watching over revelers. Thousands of Balinese and a sprinkling of foreign tourists danced and sang along Kuta Beach to ring in the New Year, trying to erase the memory of the bomb attacks. There were also prayers and calls for peace. "In the days that come, we will be full of hope. I ask all Indonesians to live in peace and security," President Megawati Sukarnoputri told the crowd on Kuta Beach, struggling to be heard above the trumpets and whistles. Security in the mostly Muslim Pakistan was stepped up for New Year's Eve with a ban on Karachi hotel parties as thousands of young people gathered on beaches on the Arabian Sea. In Japan, millions of Japanese thronged to shrines and temples. There had been no specific warnings of terrorist activity, Toshinobu Hiroki, spokesman for Japan's National Police Agency, said. And in India, violence in the disputed territory of Kashmir continued unabated. A gunfight between India's army and suspected militants Tuesday left at least six people dead, including a local woman in the Poonch sector of Jammu, police said. The battle started in the morning and continued into the afternoon. Three militants, an army captain, and a soldier were killed, in addition to the local woman, according to local police. Three other civilians in the town of Morah Kalali were critically injured.

From http://asia.cnn.com/ 01/01/2003

Asian Allies Take N. Korea Concerns to U.S.

The two Asia allies would be vulnerable to North Korean missiles and are seeking a diplomatic solution before Pyongyang adds to the two atom bombs it is believed to possess. As the talks wound through a long day at the State Department, President George W. Bush again said the United States had no intention of attacking North Korea. He also predicted a peaceful resolution. Bush said, "We expect North Korea to adhere to its obligations" and permit weapons inspections. In an exchange with reporters at the White House, Bush said that could open the way to a resumption of dialogue with North Korea. At the start of two days of talks, the administration declined to publicly evaluate a South Korean proposal to exchange U.S. guarantees of North Korea's security for a renewed freeze on the nuclear weapons program. State Department spokesman Richard Boucher said, "We will be listening carefully." White House press secretary Ari Fleischer said, "We view this as an issue that we need to work together on, and work shoulder to shoulder on." The Bush administration is determined to forge a united front against North Korea, and plans to send Undersecretary of State John Bolton to China in late January to try to enlist Chinese support for a pressure campaign.

From http://asia.cnn.com/ 01/06/2003

Arms Agency Tells North Korea to Comply or Face Council

VIENNA, Austria (AP) -- Opting for compromise but warning of confrontation, the U.N. nuclear agency on Monday demanded that North Korea abandon its atomic weapons program voluntarily or face escalated pressure from the Security Council. The International Atomic Energy Agency's 35-nation board, which includes the United States, Russia and China, agreed to censure the North for reactivating suspect nuclear programs and eliminating agency controls meant to ensure that materials are not being used to make atomic weapons. It stopped short of the next step -- reporting North Korea in breach of its international nuclear obligations to the Security Council, a move that could open the way to sanctions on the renegade communist country. But the resolution warned the North would be declared in ``further noncompliance'' of international obligations unless it lets the IAEA reimpose monitoring of its nuclear activities. North Korea expelled the agency's inspectors last week. Mohamed ElBaradei, the agency's director-general, told reporters any declaration of ``further noncompliance means under our statutes (automatically) reporting the matter to the Security Council.'' Diplomats at the meeting, who spoke on condition of anonymity, said the board decision was dictated in part by concern that an escalation could force North Korea, which is suspected of possessing nuclear weapons, over the brink. Although the IAEA warned beforehand that it was taking a ``zero tolerance'' approach toward the crisis, its resolution did not explicitly set a deadline for Pyongyang to comply. But a senior U.S. diplomat said the urgency of the language used in the document that the North had no more than a ``few weeks'' to comply. The resolution, using the acronym for the Democratic People's Republic of Korea, used strong diplomatic language to make that point. It ``deplores in the strongest terms the DPRK's unilateral acts to remove and impede the functioning of containment and surveillance equipment at its nuclear facilities.'' The North's decision to expel the IAEA inspectors ``renders the agency unable to verify that there has been no diversion of nuclear material,'' the resolution said. It called for an immediate meeting between the North Korean leadership and the agency. In Washington, the Bush administration reacted positively to the resolution. ``The president views this as the appropriate course of action,'' said Ari Fleischer, spokesman for U.S. President George W. Bush. ``The nations involved in this decision today are very broad. It takes a lot of work to get condemned by Iran and Cuba and North Korea has done it.'' ElBaradei warned North Korea to comply, saying the latest events ``further aggravate the situation.'' ``North Korea has to come clean,'' ElBaradei said. ``There are two options for North Korea: Comply with your international obligations or continue defiance that will escalate into a crisis situation and go to the Security Council.'' Monday's closed-door meeting came amid new diplomatic efforts to ease the standoff. High-level delegations from South Korea and Japan brought their concerns over North Korea's nuclear program to the Bush administration on Monday in Washington and were assured the United States would ``work shoulder to shoulder'' with them to ease the crisis. ``We view this as an issue that we need to work together on, and work shoulder to shoulder on,'' Fleischer said. The two Asian U.S. allies would be vulnerable to North Korean missiles and are seeking a diplomatic solution before Pyongyang adds to the two atom bombs it is believed to possess. South Korea also pressed Russia -- one of North Korea's few allies -- to help persuade the North to back down, and Moscow agreed to step up its contacts with Pyongyang. Defense Minister Sergei Ivanov said Monday that Russia wants stability on the Korean peninsula and called for ``quiet diplomacy'' to defuse tensions. North Korea, stung by an energy crisis, insists it needs the power. The United States says the 5-megawatt reactor in question would produce a mere trickle of electricity and could be used to produce nuclear weapons. The Vienna-based IAEA had maintained two inspectors in North Korea from 1992 until New Year's Eve, when they left after the North said they were no longer welcome. Last week's expulsions came after the North removed IAEA seals and surveillance cameras from its nuclear complex at Yongbyon, north of Pyongyang, the capital. Although he denounced North Korea for its ``nuclear brinkmanship,'' ElBaradei said the country should be given one more chance to pull back. If North Korea does step back from the brink, ``then all the doors will be open,'' including negotiations on security and meeting the impoverished country's energy and food needs, ElBaradei said.

From http://www.nytimes.com/ 01/07/2003

Russia's Retreat from Southeast Asia

Southeast Asia was a major battleground of the great powers throughout the Cold War. And since the global war on terror began it again has been the scene of major police operations and rising interest by both China and the United States as both those governments jockey to bring the area into a closer relationship with themselves, either through trade pacts or through security agreements. However, nowhere to be found in these maneuvers is Russia. Indeed, the decline in Russian power and presence in Southeast Asia has continued under Vladimir Putin without letup. Undoubtedly financial weakness underlies much of the problem. Russia publicly abandoned its base at Cam Ranh Bay even before its lease was up and even before September 11, 2001, because Vietnam's price for retaining its lease was unaffordable. Moreover, Russia no longer has important defense and security interests in Southeast Asia so there is no compelling need to maintain the base under conditions of financial weakness. Indeed, Russia, as its leaders well know, can barely hold on in Northeast Asia, part of its territory and thus the source of vital security interests. In this light a base in Cam Ranh Bay becomes an unaffordable luxury. But Russia's problems do not end here. Recently it was revealed that Russia is cutting back on its participation in major oil projects off Vietnam's shores and in its territorial waters (see Russia refines Vietnam oil ventures, January 3). This clearly is an important sign of the times regarding Russia's position in Asia generally and the vagaries of its energy industry's place there. Energy is the most important export that Russia has to offer. At the same time there has been a lot of publicity and hype concerning major projects involving Russian energy deposits in Northeast Asia. In one case, Sakhalin, Russia has secured backing from Indian, US and Japanese firms, and is talking of building a pipeline for the gas to China as well. But most of the other major projects under consideration have yet to be consummated contractually, let alone implemented as construction projects. Therefore it is essential for Russia's future in Asia that these projects move toward fulfillment. Accordingly, much of Russia's policy toward Southeast Asia, to the extent that one could discern it, involved an effort to elicit Southeast Asian participation in major energy and infrastructural projects in both Russia and in their own territory. The purposes of these projects, beyond the obvious one of selling Southeast Asian regimes the energy they need to meet rising demand, were to demonstrate Russia's reliability as a partner, make money for investment back home in energy and other industries, and ultimately to restore a significant Russian economic and political position in Southeast Asia. However, just as it can no longer sustain military power in this area, Russia apparently cannot sustain or pay its share of these major projects. As a result it does not look like an attractive investment partner for major energy projects and cannot push for them because it cannot afford them in any case. While its other major export, weapons, is sometimes attractive to Southeast Asian states, they do not compete well with Western, especially US, systems (see Russia shoots to rule Asian skies, July 20, 2002). And once India begins to produce indigenously made Russian weapons, as is envisaged under recent Indo-Russian agreements, and starts selling them to Southeast Asia, those weapons will compete with Russia's and probably drive them out of the market (see India, Russia: Friends in arms, April 13, 2002). As China too is increasingly competing for the Southeast Asian arms market now dominated by Western firms, there does not appear to be too much space for a major upsurge of interest in Russian weapons that could allow Russia to regain a place in the regional defense agenda due to real power rather than courtesy. Russia's continuing failure to secure reliable footholds in critical areas of Southeast Asia's interests bespeaks not just its ongoing failure to formulate and implement a viable strategy and policy for this area of the world. It also showcases the larger dangers of Russia's economic-strategic marginalization in East Asia more generally. Putin and other elites have frequently pointed out the danger of losing de jure or de facto control of the Russian Far East and the danger of falling too far behind in major economic competition for influence and access there. They also have repeatedly warned that the area is increasingly one of major security challenges and risks to Russia. Therefore the continuing retreat of Russian power from Southeast Asia is part of the larger process of marginalization that these officials have warned against and a telling sign of the ongoing failure of the Russian state to fulfill its policy responsibilities and devise effective policies for Asia. Not surprisingly, since nature abhors a vacuum, other major powers have begun to fill the place vacated by Russia. The United States has substantially stepped up security cooperation with Southeast Asian states against the threat of indigenous Muslim terrorism and is clearly eyeing Cam Ranh Bay as a port of call if not a permanent lodgment. Washington has also begun security cooperation with India in the Indian Ocean. This cooperation is also part of India's grand design or Look East policy to augment its influence in Southeast Asia and curtail what it perceives to be potential Chinese threats there. Both China and Japan have signed major trade arrangements with Southeast Asia in order to create free-trade agreements and they are furiously competing with each other for preeminence in the regional economy. China has also signed a major agreement with the Association of Southeast Asian Nations (ASEAN) that in essence secured its position and claims regarding the potentially rich and strategic Spratly Islands (see The Spratlys pact: Beijing's olive branch, November 6, 2002). This agreement virtually ensures that there will be no major controversy over the islands for the foreseeable future, an outcome that basically confirms China's previous land grabs there. All these moves testify to the fact that Southeast Asia's potential importance as a strategic area is again on the rise and that it will become the object of sustained major power rivalry, though not necessarily of externally supported or inspired violence. Russia, for the foreseeable future, will have little or no role here and will be in essence a spectator to those trends. It may be invited to participate in the annual ASEAN Regional Forum out of courtesy, but unless it institutes major changes in its politics and economics that presence will be one of courtesy, not one due to its large regional presence. But this spectator status threatens to become the situation in Northeast Asia as well for Russia unless the requisite changes are made. Therefore the recent announcements of reduced Russian presence in and around Vietnam's energy programs as well as its withdrawal from Cam Ranh Bay are events that have more than a regional significance. While on the one hand they are merely the latest chapter in the epochal retreat of Russian power from Asia, on the other hand there are no signs that this retreat is over or of what it really portends. (by Stephen Blank)

From http://www.atimes.com/ 01/21/2003

Anti-Terror Taskforce Agreed for SE Asia

JAKARTA, Indonesia (CNN) -- Police forces across Southeast Asia are to set up special anti-terrorist taskforces as part of intensified regional efforts to combat terrorism and apprehend terrorist suspects. The announcement, by Indonesian police chief General Da'i Bachtiar, came at the end of a three-day workshop on terrorism in Jakarta, sponsored by the Association of Southeast Asian Nations (ASEAN). The plan was originally put forward by Indonesia, and comes in the wake of last year's bombings on the Indonesian island of Bali. The attacks killed at least 192 people, most of them young Australian tourists, and brought Indonesia's lucrative tourism industry to a standstill. The blast has been linked to Jemaah Islamiyah (JI), a regional militant group linked to al Qaeda whose membership spreads throughout Malaysia, Indonesia and Singapore and across Southeast Asia. JI is regarded as the biggest terrorist threat by regional governments. "Each Asean member country will have an anti-terrorist taskforce," Bachtiar told reporters Wednesday. "In the event of a terrorist attack, the affected country can request assistance from other Asean countries," he said. Such assistance could be in the form of, but not limited to, pursuing and apprehending suspects, questioning witnesses, searching and obtaining evidence, as well as evacuating and treating of victims. The taskforce will be linked by liaison officers who will work together in developing threat and risk assessment, planning responses, as allocating resources and assistance, Bachtiar said. The taskforce is expected to be fully operational by July. Indonesia has also proposed criminalizing acts of terrorism and to make them extraditable offenses -- a plan that is expected to feature high on the agenda of an Asean meeting on trans-national crime in Hanoi in June. Several of those suspected of plotting and carrying out the Bali attacks were Malaysian and Singaporean nationals, investigators say. Legal complications have prevented them from being extradited to Indonesia. However, Indonesian authorities have been given access to interrogate the suspects in their respective countries. To date, 30 people, including several suspected key players in the Bali attack have been arrested.

From http://asia.cnn.com/ 01/22/2003

TOP↑

CHINA: New Insurance Rules Implemented from 2003

A new law on insurance and new rules on vehicle insurance took effect the first day of 2003. With the new law, which will benefit insurance companies, enhance regulation of insurance agencies and increase the reputation of the insurance industry, property insurance companies can sell accidental insurance policies. This is expected to enhance competition in the short-term life insurance market. Some companies said they will be actively involved in this field, with products such as accidental aviation insurance policy. All insurance companies will have more rights in drawing up insurance rates and can develop distinctive products. Reinsurance will be greatly affected according to the new law. The set reinsurance rate will be decreased five percent year on year from the current 20 percent. Insurance for vehicles is now market-oriented. The new regulation allows companies to formulate rates according to risks of vehicles and drivers' safety records. China also plans to reform accidental aviation insurance products at the beginning of 2003. All the policies will be sold by computer and customers can ask for refunds or change according to flights.

From http://ce.cei.gov.cn/ 01/02/2003

New Regulation Issued to Facilitate Enterprise Restructuring

China's Supreme People's Court (SPC) promulgated a new regulation in Beijing on January 3, to correct and curb illegal activities relating to enterprise restructuring and better protect creditors' and employees' legitimate rights and interests. ???? According to the regulation, effective Feb. 1 this year, civil parties involved in disputes resulting from the restructuring of enterprises will be able to file a civil suit in court. Such disputes may result from the merger, sale or split-up of an enterprise, debt to equity swaps, or the conversion of a state-owned enterprise into a corporation or joint-stock company, the regulation says. With the deepening of China's state-owned enterprise restructuring, new problems beyond the scope of current laws and regulations are arising, SPC Vice-President Li Guoguang said at a press conference this morning. Li said that the new regulation, which covers all the problems that have emerged thus far in China's enterprise restructuring, will guide the work of Chinese courts in this regard and provide a strong legal guarantee for the restructuring process. "This regulation will protect the results of China's enterprise restructuring more effectively and play a positive role in maintaining enterprise and social stability," he said. In addition, the protection of employees' interests is one of the regulation's objectives, Li said. He asked China's courts at various levels to pay special attention to the protection of the legitimate rights and interests of employees in enterprises to be restructured, adding that the courts should firmly stop any illegal activities related to enterprise restructuring and tolerate no actions detrimental to the interests of employees.

From http://ce.cei.gov.cn/ 01/03/2003

Hu Jintao Stresses Need to Re-employ Laid-off Workers

Hu Jintao, general secretary of the Central Committee of the Communist Party of China (CPC), Sunday stressed the need to further re-employment projects for laid-off workers. Hu made the remark during his inspection in the Inner Mongolia Autonomous Region. He said governments at various levels must properly carry out the policies announced by the central government to create a favorable environment for laid-off workers and encourage them to develop their own career. The government shall make more efforts to create jobs for laid-off workers based on the concrete conditions of the local economy, he added. Administrations are also required to provide essential training and social insurance for laid-off workers, Hu said. Hu also noted that more efforts will be directed to meet the needs of needy people and help them alleviate poverty with their own efforts. He called on the less developed areas in China to develop economy with their own characteristics, which will not only make them flexible to the change of the market but also well protect the environment. The central government and more developed areas will further increase support for the less developed areas in a bid to achieve a balanced regional economic growth, Hu said.

From http://english.peopledaily.com.cn/ 01/06/2003

China to Speed Up Urbanization

The Chinese government is planning to speed up the urbanization process in 2003 while considering an urban development model with Chinese characteristics. Minister of Construction Wang Guangtao told a national construction conference which ended on Tuesday that China needed to effectively develop urbanization with Chinese characteristics in order to resolve issues concerning agriculture, rural areas and farmers. Urban construction had boomed in recent years, with large cities matching those in developed countries, but living standards in rural areas, especially in central and western areas, still lagged far behind. Statistics show that the average net income of farmers in 2002 was 2,470 yuan (298 US dollars), while the average disposable income of urban residents exceeded 7,500 yuan (906 US dollars). Wang said speeding up the urbanization process would boost urban economies and produce more job opportunities for rural residents. To this end, China must integrate urban development with new industries to help readjust its economic structure and reduce the differences between urban and rural areas, said the minister. In addition, all cities must advance in harmony with their people, natural resources and the environment. Besides infrastructure and environment construction, all cities and towns in China must develop in a complementary way for common prosperity. Wang said the urbanization in China would increase the number of cities and urban populations, but also produce vital changes in social and economic structures. China's urbanization progressed rapidly in recent years, hitting 37.7 percent of the population by the end of 2001, 7 percentage points over that of 1998. China has 662 cities and 20,358 towns, with an total urban population of 481 million.

From http://english.peopledaily.com.cn/ 01/08/2003

Retired Aide to Mao Calls for Progress to Democracy

BEIJING— A former secretary to Mao has published a strikingly forthright call for change in a Beijing magazine this month, the latest sign of growing demands for open discussion of political reform. The retired official, Li Rui, 85, warned in a speech published in the magazine China Chronicle that the country must embrace democratic politics and free speech to avoid stagnation and possible collapse. "Only with democratization can there be modernization," he said. "This has been a global tide since the 20th century, especially the Second World War, and those who join it will prosper while those who resist will perish." Mr. Li, a Communist Party member since 1937, is a longtime advocate of faster political liberalization. He has been held at arm's length by party leaders, but his status as a confidant of Mao and a pugnacious critic of conservatives inside the party have given him a degree of protection from censorship, and a large readership. China Chronicle is a popular history magazine published by a cultural research institute run by retired officials, and is widely read in the party. Mr. Li's call to action comes at a sensitive time when many officials and academics here are waiting to see if China's new leaders, installed at a party congress in November, will consider relaxing one-party rule. Mr. Li made his comments in a speech to a group of delegates at the congress. He warned that China's stability could be imperiled by delaying political change. In recent official announcements, Communist Party leaders have said the party must strengthen internal debate and make selection of officials more competitive. But they have not shown any signs of contemplating wider changes. Mr. Li challenged them to lead the way with major reforms starting at the top. He proposed formally limiting the party's leaders to a maximum tenure of 10 years. He also proposed wide-ranging measures to limit the party's powers, begin introducing popular election of government officials and protect freedom of speech and independent rule of law. (by Chris Buckley)

From http://www.nytimes.com/ 01/08/2003

China Drafts Venture Capital Law

China is drafting a law that will let overseas venture capitalists raise money locally, according to Bloomberg News. The bill, which should pass this year, will allow overseas venture capital companies to raise money from Chinese companies, trusts, insurers, pension funds and the rich. China's National Social Security Fund has 100 billion yuan (US$12 billion), most of which must be invested in treasury bonds and bank deposits.

From http://ce.cei.gov.cn/ 01/10/2003

WTO: Draft Law to Balance Protection and Compliance

A senior trade official said pending amendments to the nation's nine-year-old Foreign Trade Law will aim to create a balance between better protection of domestic enterprise and compliance with World Trade Organization (WTO) rules. The current Foreign Trade Law was enacted in 1994, when the Uruguay round had not been completed. "The nation's foreign trade has seen great leaps forward in the past nine years and the government's style of managing foreign trade has changed,'' said Zhang Yuqing, director of the Department of Treaty and Law of the Ministry of Foreign Trade and Economic Co-operation, in an exclusive interview with China Daily. In the post-WTO era, the functions of the government have shifted from managing the specific operation issues of enterprise to ensuring fair and ordered competition and taking measures to protect domestic enterprise when they face discrimination or injury in foreign trade, said Zhang. (Meng Yang) The new foreign trade law will fill the gaps of the current provisions so that domestic enterprise find it easier to protect their interests and rights, he said. For example, the new legislation is expected to explain the implications of trade promotion and specify how to implement the mechanism. It will clarify what constitutes discrimination against Chinese exports and what measures can be taken in cases of such discrimination. Current legislation only provides some general principles of trade promotion. "Under the new law, Chinese enterprise will be able to conduct investigations, turn to arbitration and even resort to the WTO to solve any trade barrier or discrimination which goes against WTO principles,'' he said. Zhang said the new law would also help the nation's exports and service trade sectors to open new overseas markets. The intellectual property rights and some new mechanisms, such as tariff quotas and State trade, should also be incorporated into the new law. Chinese experts on foreign trade say the government should make full use of WTO rules which reflect national interests, such as clauses on general exception and security exception, to better protect domestic enterprises, said a lecturer with the University of International Business and Economics, who asked to remain anonymous. The draft amendment is expected to be submitted to legislators this year after gaining approval from the State Council, said Zhang. Under Legislative Procedure Law, the State Council is eligible to submit draft legislation to the top legislative body.

From http://www.chinadaily.com.cn/ 01/13/2003

China Blocks Internet 'Blog' Site

BEIJING, China (Reuters) -- China has blocked an Internet site used by more than one million people worldwide to post on-line diaries, known as blogs, users and its developer said on Wednesday. The U.S.-based "blogspot" Web site, where people write about their daily lives up to several times a day, has been inaccessible through Chinese networks for a week, they said. "This is not due to a technical problem," said Jason Shellen, business development director at Silicon Valley-based Pyra Laboratories which runs the site blogspot.com. He said users received no explanation, leaving the young Internet startup's staff of six to field queries from frustrated "bloggers" in China who could update but not read diverse musings ranging from dating to pop music to teenage angst. About 50 million people in China surf the Internet but the developer of "blogspot" could not say how many of them place or read postings on the Web site. Authorities openly control Internet and media content in China. Internet police, who number nearly 40,000 in Beijing alone, block several foreign news sites and often force Chinese Web pages to delete content judged objectionable. An official at the Ministry of Information Industry, the telecoms and Internet regulator, said the block could be due to material deemed pornographic or detrimental to government interests. "The Chinese government would never tell Western sites what to post or what not to. They have freedom of expression," he said. "So it will just take away access." Ben Edelman, a fellow at the Berkman Center for Internet and Society at Harvard Law School, said the Web police barred the site by blocking its Internet-protocol address, analogous to cutting a phone line. Now, some bloggers in China are using their tech-savvy to blast the government. A 20-year-old college student in the southern city of Hangzhou who calls herself "Leylop" on the Internet said the block would only foment debate and show the Chinese government in a bad light. "I was pissed off," she said in English. "Blockage only causes more dissent. The bloggers who have something to say won't be deterred by the blockage at all, we'll find other ways." Pyra's Shellen said the start-up was starting to approach Chinese officials to resolve the issue and might seek advice from leading search engine Google, which suffered a similar block in September. "We want to proceed with cool heads. We are not so upset that we want to rattle any cages," he said. China blocked access to Google, which has soared in popularity due to its ability to run searches in Chinese, in a crackdown on Web content ahead of a watershed leadership handover in November. The ban was lifted about 10 days later after Google protested. In March 2002, about 130 major Web portals, including Yahoo Inc, signed a self-censorship pledge that drew fire from critics who said the sites were sacrificing freedom of expression for the sake of business. Chinese portals such as Sohu.com have devised a thorough list of terms -- including President Jiang Zemin, the Falun Gong spiritual group and Tiananmen Square protests – which are automatically filtered from the site.

From http://asia.cnn.com/ 01/15/2003

China Issues Rules on Foreign Debt Management

A new interim regulation will be effective March 1 for the management of China's foreign debt.
Jointly issued by the State Development Planning Commission (SDPC), the Ministry of Finance, and the State Administration of Foreign Exchange, the document provides guidelines relating to the use, repayment and supervision of foreign debt. It also provides definitions and classifications. As a major form of foreign capital utilization, foreign loans have played an active role in spurring the development of China's economy. The security of foreign debt is crucial to the sound functioning of the national economy and to the stability of the financial system. An official with the SDPC said the regulation will help to improve the relevant legal framework, standardize the management of the country's foreign loans and reduce foreign debt-related risks.

From http://ce.cei.gov.cn/ 01/15/2003

More Laws Supporting Agricultural Development

China's top legislator Li Peng said Wednesday that China adopted and amended 11 additional laws relating to agriculture and rural areas, creating better conditions for the country to develop the rural economy and protect farmers' legitimate interests in the past five years. Li, chairman of the Standing Committee of the National People's Congress, said that the additional laws have brought the total number of laws on agriculture and rural areas to 19. These laws have laid a solid foundation for the country to revitalize agriculture and the rural economy through the rule of law, said the chairman. He made the remarks during a panel discussion on two amended laws, namely, the agricultural and grasslands law and the newly-adopted law on rural land contracts. The amendments to the agricultural law, which will take effect on March 1, 2003, incorporate new regulations to accelerate the transfer of surplus rural labor, ensure the safety of farm produce and advance agricultural science and technological development. The grasslands law amendments tighten supervision of tourism ventures in grassland areas and forbid the use of strongly toxic pesticides in such locations. The top legislator called on officials at all levels to improve their awareness of the rule of law while dealing with issues concerning agriculture and rural areas. He called on the entire Chinese community to pay more attention to the country's agriculture and farmers and to increase their support for agricultural development.

From http://ce.cei.gov.cn/ 01/16/2003

China to Step Up Enforcement of Industrial Safety Law

China will step up enforcement of industrial safety law and increase international cooperation to meet its 2003 goal of reducing the number of major industrial accidents by 10% and reducing the number of fatalities in the coal mining and transportation industries. Wang Xianzheng, director of the State Administration of Work Safety (SAWS), made the remarks Thursday at a national conference on production safety. Wang said the SAWS plans to establish nearly 30 auxiliary rules and regulations and eight departmental regulations relating to the newly-enacted law on production safety at the earliest possible date. It will also set up a system of national standards on workplace safety, consisting of 38 regulations on blast safety and powder and dust explosion prevention. Wang also stressed the importance of law enforcement, adding that any breach of the law should be reported immediately to the relevant administrative departments or local governments. In the area of international exchange and cooperation, Wang said China is keen to cooperate with the International Labor Organization (ILO), the International Social Security Association, the European Union and the Asian Development Bank in the field of production safety. China intends to study the feasibility of becoming a signatory to the ILO convention on occupational safety and health, and plans to cooperate with the United States, Germany, Japan and other nations in industrial safety training and management projects.

From http://ce.cei.gov.cn/ 01/17/2003

China's Securities Watchdog Vows to Brace Market Regulations

China's securities regulator will "spare no efforts" in continuing its reform campaign to embrace its "enormously bright" capital markets future, a senior official told a global corporate governance forum in Shanghai yesterday. "We are committed to being a pro-active regulator in fostering corporate governance, in enforcing our rules, in safeguarding the integrity of our markets, and in championing the rights of our investors," said Laura Cha, vice-chairman of China Securities Regulatory Commission (CSRC), the market watchdog. Over the past several years, numerous measures have been taken to improve the corporate governance standards of listed companies, including independent directors, comprehensive information disclosure requirement and joint inspection of all listed companies by CSRC and the State Economic and Trade Commission. Legal and accounting reform is under way, and includes strengthened enforcement measures. "We have put in place a regulatory framework which takes into consideration features and problems unique to our market and our economy," Cha said. A great deal remains to be done, however, as China's stock market is still stained by scandals and irregularities. "Indeed, we would readily admit that ours is an emerging market and that we have our share of the weaknesses of an emerging market," Cha said. But she highlighted the fact that given the relatively short history of the market and regulator, China's capital market "has actually done remarkably well." Cha pointed out that it is not enough to have a plethora of rules and regulations. Consistent, fair and transparent enforcement also counts. Improving the credibility and standard of intermediaries and professionals, as well as investor education are of the utmost importance to the capital market, she added.

From China Daily 01/22/2003

FM Spokeswoman on China's Anti-Terrorism Stance

Appraising positively the United Nations Security Council Ministerial Meeting on Counter-Terrorism that opened Monday in New York, Chinese Foreign Ministry spokeswoman Zhang Qiyue Tuesday reiterated China's stance on anti-terrorism. Zhang said the Chinese government held that maintaining peace and security for humankind was the core of anti-terrorism while universal development and common prosperity was the basis. Closer communication and integration among societies constituted the guarantee of anti-terrorism, to which stronger international cooperation was the key factor, said Zhang, noting that Foreign Minister Tang Jiaxuan's address to the meeting on Monday elucidated the Chinese government's principled stance and positions. There are still frequent terrorist attacks in the world despite marked progress scored in the international anti-terror campaign after the September 11 incident in 2001, Zhang noted. International anti-terror cooperation was the common aspiration and urgent demand of the global community and China would consistently support the United Nations playing a leading role in fighting terror, she said. The foreign ministers meeting at the UN Security Council was highly significant, she added, as it not only reviewed the anti-terror campaign so far but charted the direction guiding the future international cooperation. Chinese Foreign Minister Tang Jiaxuan met with UN General Secretary Kofi Annan during the meeting and they conferred on how to strengthen the UN's role in anti-terror arenas and to resolve regional conflicts, Zhang said. During the meeting, Tang also met with the US Secretary of State Colin Powell, Russian Foreign Minister Igor Ivanov, German Deputy Chancellor and Foreign Minister Joseph Fischer, and Pakistan Foreign Minister Khurshid Mahmood Kasuri, said the spokes woman.

From http://www.china.org.cn/ 01/22/2003

Media Sector Opened Wider

Publication management rules will be adjusted to allow more foreign and private capital into the book, newspaper and magazine distribution market, an official from the State Press and Publication Administration (SPPA) told China Daily Wednesday. The new rules will remove the current restriction whereby only State-owned enterprises can enter China's publications wholesale market, said Liu Bo, director of the administration's distribution department. "Overseas capital and privately owned businesses can both enter wholesale publications distribution in the form of joint ventures,'' he said. But State capital should hold a controlling stake in such joint ventures. Liu said the rules are being revised in line with the promises China made when joining the World Trade Organization (WTO) in December 2001. He said China will accept and handle applications from overseas investors to invest in the book, newspaper and magazine distribution sector once the rules go into effect. The regulations could be published as early as the first quarter of this year. More than 60 overseas companies have set up offices on the Chinese mainland with the intention of investing in the publications distribution business. They are likely to be the first to have their applications approved, according to some industry insiders. But China will allow no overseas investment in the editing sector, and a few of the 140 WTO members have pledged only limited access to overseas investors in their respective editing sectors, said Liu Bingjie, deputy director of the SPPA. In keeping with its WTO commitments, China should open its entire book, newspaper and magazine wholesale and retail sector to overseas investment during its third year of WTO membership. It should also lift all restrictions limiting the number of overseas- funded distribution companies, geographical locations and share-holding rights. Deputy Director Liu said the books, newspapers and magazines involved will primarily be those published on the Chinese mainland. Last year, China opened up the retail business in Beijing, Shanghai and Tianjin municipalities, Guangzhou in South China's Guangdong Province, Dalian in Northeast China's Liaoning Province, Qingdao in East China's Shandong Province and the country's five special economic zones -- Hainan, Shantou, Shenzhen, Xiamen and Zhuhai. This year, all mainland provincial capitals, together with Chongqing Municipality and Ningbo in East China's Zhejiang Province, will allow foreign capital into their retail markets. Although State capital will no longer be the sole player in the publications distribution market, senior managers of State-owned distribution companies have expressed confidence they can face the challenges. "Despite the protection lost, the change in the distribution market will actually lift the pressure put on us by readers, who are demanding more and more books,'' Ha Jiuru, president and general manager of the Shanghai Xinhua Distribution Group, told China Daily. His group is one of the top distribution groups in the country. He said competition for market share by non-State capital should encourage existing players to develop into stronger firms rather than going on the defensive. "We will not be limited to wholesale and retail business. There is much more space in the distribution business for State-owned groups to get established and developed,'' he said. The Shanghai Xinhua Distribution Group established a publication trade centre late last year. Ha said this was an attempt to make a breakthrough in the traditional distribution business. The centre is composed of a hall displaying new books, an online display and trade platform and a large bookstore. Ha said the centre lets buyers and sellers do both spot trading and forward business, which is new in China's current distribution market.

From http://www1.chinadaily.com.cn/ 01/23/2003

JAPAN: Okuda Offers Economic Solution: Substantially Raise Sales Tax

Hiroshi Okuda, Chairman of the Japan Business Federation (Nippon Keidanren), thinks he has a cure for the sick economy, but consumers aren't likely to enjoy his bitter medicine. Okuda's remedy: Substantially raise the consumption tax and use the revenues to sustain the social security system. "One reason why Japan's economy has fallen (for over a decade) is that we haven't built a (sustainable) social security system (to cope with a rapidly aging society)," Okuda said in a yearend interview with reporters. "A proper system could erase public concerns over the future and consequently stimulate consumer spending." Although Japan presently has over 3 million people out of work, a labor shortage has been forecast. The National Institute of Population and Social Security Research has estimated that the nation's working population will decrease to 62.6 million people in 2025 after hitting a peak of 68.7 million in 2005. The dwindling number of workers will thus face the burden of mounting social security spending on pensions and medical services for the elderly. Raising the consumption tax will spread the burden across a broader spectrum of the public, Okuda figured. Okuda, who is also chairman of Toyota Motor Corp., did not specify how much the tax should be hiked. But in a recently released grand vision of an ideal socioeconomic system leading up to 2025, Nippon Keidanren proposed hiking the tax by 1 percentage point every year beginning in fiscal 2004 until it reaches 16 percent in fiscal 2014. The proposal also says that public spending on social welfare programs should be concurrently reduced to establish a sustainable system. "If the consumption tax is raised drastically at once, it could snuff out consumer spending," Okuda said. "So it should be raised gradually, and the rate should vary depending on what is taxed." For instance, the tax on daily necessities, including food and clothing, could remain low, while luxury goods could be taxed higher, he said. Another way to maintain social security and prevent a labor shortage would be to accept more foreigners into the workforce, Okuda said. "We will still face a labor shortage even if more female and elderly Japanese join the workforce, so we would need to employ more foreigners," he said, noting that foreigners who can contribute to scientific advancement should be encouraged to immigrate to Japan to stimulate the nation's intellectual fields. Despite the oft-repeated forecasts of a labor shortage, however, the nation currently has a glut of workers. Corporations are accelerating restructuring efforts amid the protracted economic slump, forcing an increasing number of people out of jobs. The unemployment rate came to 5.3 percent in November, with 3.38 million people left idle. Okuda said that in the short term the government must spread a safety net to support unemployed people and make more efforts to create jobs. To this end, he said Nippon Keidanren will try to place more pressure on politicians. This year, Nippon Keidanren will also craft corporate political donation guidelines based on its assessment of each political party's policies and their results, he said. One of Nippon Keidanren's predecessor organizations, the Japan Federation of Economic Organizations (Keidanren), exerted strong influence over politics, coordinating donations from member firms and associations and channeling them mainly to the ruling Liberal Democratic Party. However, Keidanren stopped the practice in 1994 -- a year after the LDP left the government's helm for the first time in 38 years. Observers say the business circle's leverage over politicians has since weakened. Nippon Keidanren was created last May by the merger of Keidanren and the Japan Federation of Employers' Associations (Nikkeiren), a business lobby dealing with labor-management issues. "We will not force our members to make political donations (as Keidanren used to do)," Okuda said. "But if we display a positive attitude (toward donations by making the guidelines), it would encourage some companies (to donate)." On economic prospects for 2003, Okuda predicted that Japan can achieve 1 percent annual economic growth if international events such as a U.S.-led war against Iraq or a major terrorist incident do not take place. "I think (this year) will be uncertain, as the economy is affected by international affairs," he speculated, adding that at any rate, to boost the domestic economy, industries must create new technologies and attractive products to stimulate consumerism. The government is now stepping up efforts to counter deflation and accelerate bad-loan disposals through a comprehensive economic package, including the creation of an official industrial-revival and -cooperation body. Okuda said Nippon Keidanren will work with the government to resolve such problems by providing human resources to the planned government entity, which will be established this spring to purchase bad loans to problematic but viable companies. He also pointed out that property and stock dealers should be given tax incentives in order to boost the liquidity, and thus the price, of assets. Okuda also said the public and private sectors should work to create a single free-trade zone in Asia, creating a major regional market that can match those of the United States and Europe. "Japan would (in the process) be able to prosper together with rapidly growing economies like China and Vietnam," he said. "To become a leader in the region, (Japan) must also make its society more trustworthy, and the private sector can contribute by engaging in further dialogue in Asia.” (by Akemi Nakamura)

From http://www.japantimes.co.jp/ 01/01/2003

Koizumi Vows to Realize Reforms in 2003

Prime Minister Junichiro Koizumi marked the New Year on Wednesday pledging to put Japan's economy back on track by speeding up the disposal of bad loans held by the nation's commercial banks. "I have consistently followed a policy of structural reforms," Koizumi said in a New Year's statement. "This year, I will try to recognize a reform track by accelerating the disposal of bad loans, reviving industries and conquering deflation." "Japan has a great deal of potential," Koizumi said. "Carrying out reforms is exactly the way to realize Japan's potentialities." "Harsh circumstances continue," he said. "But with confidence and hope, I am resolved to exert all-out efforts to carry out reforms." Koizumi also said Japan will deploy active diplomacy to contribute to world peace and stability. On relations with North Korea, Koizumi said, "Keeping the position of the abductees and their families in mind, I will try to support and hunt for the truth."

From http://www.japantoday.com/ 01/02/2003

Russia and Japan Sign Accord to Seek End to Dispute over Islands

President Vladimir V. Putin of Russia and Prime Minister Junichiro Koizumi of Japan signed an agreement today calling for an accelerated effort to resolve the long-standing territorial dispute over the Kurile Islands that has left Russia and Japan technically in a state of war for six decades. In a meeting at the Kremlin that was overshadowed by North Korea's decision to withdraw from the Nuclear Nonproliferation Treaty, the leaders pledged to pursue deeper economic and political ties even as they try to resolve a dispute that has bedeviled governments of both countries since the Soviet Union seized the islands at the end of World War II. Emphasizing their areas of agreement, Mr. Putin and Mr. Koizumi went to great lengths to express support for each other's economic and foreign policy goals. In the document they signed, for example, Japan reiterated its support of Russia's efforts to join the World Trade Organization, while Russia pledged to support Japan's efforts to become a permanent member of the United Nations Security Council. The two also joined in the chorus of world leaders criticizing North Korea's announcement today and jointly reiterated their calls on Iraq to comply with international inspections of its weapons programs. Mr. Putin hailed today's agreement which was described as an "action plan," not a formal treaty as a historic document in Russian and Japanese relations. "We have not had documents of this type with either Japan or any other country," he said after their meeting, held in the Great Kremlin Palace, adding that it would deepen relations on virtually every level. For all the accord, however, the dispute over the Kuriles four rugged islands northeast of the Japanese island of Hokkaido remains a substantial obstacle to improved ties, one reinforced by nationalistic sentiments in both countries. Even the name of the islands the Southern Kuriles to the Russians and the Northern Territories to the Japanese is so sensitive that neither was used in today's agreement. Nor did the agreement specify how the two countries would resolve the territorial dispute, which has prevented the flourishing of diplomatic and economic relations. But enticed by the prospect of expanded trade and development, including a pipeline across Siberia to the Sea of Japan, they agreed to do so as quickly as possible. "In spite of the fact that this issue is highly complex, we will find a fair solution if we take the interests of both countries into account," Mr. Putin said. On the eve of his four-day visit to Russia, Mr. Koizumi said it was "highly regrettable" that two members of the Group of Eight industrial nations did not have a peace treaty or an agreed-upon border. Today he called it "the sorest unresolved problem" between the two countries. With the agreement today, they essentially agreed to expand economic ties as negotiators separately wrangle over the terms of a peace treaty. Before the meeting, Japanese officials expressed hope that the two sides would announce an agreement in which Japan would support construction of a $5 billion, 2,500-mile pipeline between Angarsk, near Lake Baikal, to ports in the Far East, opening a major outlet for Russian oil to Japan that could reduce its dependency on oil from the Middle East. Russia, however, is considering an alternative pipeline that would pass through China. Today's document left that decision unresolved, while pledging generally that Russia and Japan would cooperate in exploiting energy resources and developing pipelines in Siberia and the Far East. (by Steven Lee Myers)

From http://www.nytimes.com/ 01/11/2003

State Eyes Cutting Tax Breaks for Richer Pensioners


The Finance Ministry might reduce tax breaks for pensioners in response to public criticism that the upper-class elderly are unduly benefiting, ministry sources said Sunday. The government's Tax Commission will study the proposal in discussions slated to begin Friday. The Finance Ministry is aiming to have the proposal reflected in the fiscal 2004 tax reform plan, the sources said. Under the current national and corporate employee pension systems, recipients aged 65 or older are eligible for a minimum deduction of 1.4 million yen from their annual taxable income, regardless of their income levels. The tax breaks have received criticism not only from younger generations but from some older people who say uniform deductions are unfair to low-income pensioners, the ministry said. The proposed reduction of the breaks, introduced in 1988, will thus target pensioners in high-income tax brackets or those with large assets, the sources said. In addition to the pension tax breaks, seniors are currently entitled to a deduction of 500,000 yen if their annual income is 10 million yen or less. They can deduct 480,000 yen if they are dependents. The ministry will also review whether these breaks are actually necessary while watching moves by the health ministry to reform the pension system, the sources said. The Finance Ministry will have to determine such issues as who should be eligible for reduced tax breaks.

From http://www.japantimes.co.jp/ 01/13/2003

Carves Out New Military Role

Speculation is rife about the direction of Japan's foreign policy, given recent world developments, especially the US anti-terrorism campaign. Seizing on the fear created by the September 11 terrorist attacks in the United States, Japan is using its military to assume a higher international profile. In his New Year's Day statement, Japanese Prime Minister Junichiro Koizumi said Japan will engage in active diplomacy by taking the "initiative" on the basis of "international co-operation," along with "national interest." It is not difficult to find a policy shift under way when we examine a spate of recent developments in Japan's foreign policy. Koizumi's remarks echoed a foreign policy proposal presented by the Task Force on Foreign Relations for the Japanese Prime Minister in November. The team was established in September 2001 with Special Adviser to the Cabinet Secretariat Yukio Okamoto serving as chairman with the objective of advising the prime minister on foreign relations. The report, titled "Basic Strategies for Japan's Foreign Policy in the 21st Century: New Era, New Vision, New Diplomacy," says Japan should shift direction and set up its own "axis" around which to form policy in the face of major changes worldwide. Japan should be more assertive in protecting its national interests and rely less on its traditional style of international diplomacy. The report identifies globalization, developments in military affairs, and China's economic growth as major challenges facing Japan. The team recommends that existing policies regarding individual countries and regions be reviewed. While acknowledging relations with the United States continue to be paramount, particularly the bilateral security alliance, Japan should not simply acquiesce to Washington, but also be able to form its own stance and debate issues before forming policy, the report says. China is quite high on Japan's foreign policy agenda. The report describes the relationship between the two countries as the one that interweaves "co-operation and coexistence" with "competition and friction." The report warns that China's rapid economic growth will have a significant impact on Japan's diplomatic affairs. It also warns of a "China threat" by finger-pointing at China's military build-up. Japan has spent a total of 13.7 billion yen (US$116.4 million) on its missile defence project alone during the research stage and has earmarked 1.9 billion yen (US$16.1 million) for the project in fiscal year of 2003. And the shift in Japan's defensive foreign policy goes beyond a single report. At the meeting of Japan-US Security Consultative Committee in Washington in December, Japanese Defence Agency Chief Shigeru Ishiba affirmed that Japan would further investigate the development and deployment of a ballistic missile defence system that his country and the United States have been jointly studying. Japan and the United States issued a statement in which they described the missile defence initiative as the only way to protect the lives and property of Japanese. The two countries began jointly researching the initiative in the fiscal year of 1999. They agreed to consider developing the system five years after the start of research. However, many issues cannot be sidestepped if the system is to be deployed. For example, it would be difficult to determine whether Japan was the true target of enemy missiles. If the system was used to intercept missiles targetting other countries, this could be construed as a military attack, which runs counter to the constitutional ban on exercising the right to collective self-defence. Showing Japan's support for US actions against Iraq, Defence Agency Chief Shigeru Ishiba declared in early December that Japan was considering "all kinds of options," including the dispatch of ground Self Defence Forces (SDF) troops to assist post-war reconstruction of Iraq. Japan has deployed warships and supply vessels to the Indian Ocean as logistics support for the US-led anti-terrorism operation under a special law passed in 2001 after the terrorist attacks in the United States. The anti-terrorism law, however, does not allow the SDF to help US forces in Iraq and the vicinity if a war breaks out. With nationalism rising in Japan, some politicians have called for the armed forces to play a more active role in their country's foreign policy. A 16-member Advisory Group on International Co-operation for Peace, headed by former United Nations (UN) Undersecretary-General Yasushi Akashi, proposed in December that Japan should consider revising its laws to take a more active role in peacekeeping activities, such as providing logistics support for multinational forces. Under Article 9 of Japan's Constitution, Japan "renounces war as a sovereign right of the nation and the threat or use of force." This article has been traditionally interpreted as prohibiting collective defence, including joint military operations with US forces and collective security activities like UN peacekeeping operations. Some of the proposals go beyond the government's interpretation of the Constitution. The panel stressed that the global environment is rapidly changing, and the emphasis of peacekeeping activities has shifted from preventing war between nations to averting regional conflicts, internal strife and terrorism. The panel urged the Japanese Government to consider a new law that would allow the SDF to support multinational forces involved in UN-authorized peacekeeping activities. The current peacekeeping co-operation law also limits Japan in peacekeeping activities directly under the auspices of the United Nations. It does not include peacekeeping activities led by other multinational forces. Though Akashi brushed aside the assumption that his panel had been influenced by recent debates over whether Japan should support an attack against Iraq by a multinational force, the timing of the proposal is controversial. It supports the suggestion that the recommendations could pave the way for Japan's involvement in a possible strike on Iraq by US-led multilateral forces. The Japanese Government has reportedly set up a special task force under Prime Minister Koizumi to draft a new law that would allow the deployment of troops in Iraq and nearby regions to help the US troops with postwar transport and logistic operations. Japan is expanding military roles overseas - either through UN forces or in alliance with the United States - in the name of becoming a "normal country." Every single step Japan is taking to reach the goal is dangerous. Its latest interpretation of the clause renouncing war in its Constitution has become a virtual revision since the Aegis destroyer was dispatched under last year's counter-terrorism law. Japan has a right to play a military role - subject to constitutional and international legal constraints. But its lack of soul-searching and seeming inability to confront its World War II atrocities across Asia, coupled with its pursuit of a higher international profile, has alarmed its neighbours. It is therefore wholly justified for them to question Japan's ambitions. (by Chong Zi)

From http://www1.chinadaily.com.cn/ 01/21/2003

Deregulation Rules Proposed

A government panel Tuesday put forth a proposed basic policy on special structural reform zones, introducing an evaluation system to assess the suitability of deregulation measures for application across the country, officials said. The Headquarters for the Promotion of Special Zones for Structural Reforms, chaired by Prime Minister Junichiro Koizumi, introduced a three-step system under which an assessment committee of regulatory experts and representatives from the private sector would evaluate whether deregulation in special zones achieves the desired economic effect. Under the proposed basic policy, if the committee decides that the deregulation has achieved the desired economic effect, the deregulation measures can be expected to be promoted across the country. The basic policy is expected to be adopted by Cabinet at a meeting Friday and the assessment committee will be formed later this year. The regulations to be eased for businesses are expected to be mainly in such areas as medical and educational services. The committee is expected to forward to the prime minister its evaluations on deregulation experiments in special regulatory reform zones, accompanied by one of three recommendations: -- Deregulation should be carried out across the country. -- Deregulation experiments should continue in limited areas. -- Special regulatory reform zones should be abolished or corrective regulatory measures taken. Should the government decide to pursue a course of deregulation based on the assessment committee's report, ministries and agencies concerned would have to revise related regulations to actively promote deregulation. If the government decides to abolish or take some corrective measures for the special zones, regulations will need to be revised accordingly. The basic policy prohibits ministries and agencies from adding new regulatory conditions to activities in the special zones on top of those set under the policy, to prevent such central public offices from crippling the special zone system. It also would oblige ministries and agencies to respond within 30 days to inquiries from local governments that want to be designated as special zones, about interpretations of regulations applied to such zones. Municipalities will be asked to provide answers in writing within 30 days to firms who have submitted proposals for special zones if the local government decides not to forward the proposal to the central government. The government is to set up a system to assign advisers to deal with complaints from local governments and companies. It is to accept local governments' applications for special zones over a two-week period in April. The government plans to organize hearings in March for local governments to make their cases for deregulation zones considered feasible. The first special zone is expected to be established in April. Applications will also be accepted in July and October this year and January next year.

From http://www.yomiuri.co.jp/ 01/22/2003

Japan to Cut Contribution to the Budget of the U.N.

TOKYO — Japan, the second largest financial contributor to the United Nations, plans to cut its support by one-quarter in coming years, senior foreign policy makers said here this week. Japanese diplomats calculate that Japan's gross domestic product accounts for 14.4 percent of the global economy. Japan pays 19.5 percent of the United Nations budget, or almost $1 billion a year. By contrast, the United States accounts for 30 percent of world gross domestic product, and pays 22 percent. "Japan cannot just give sweet faces to everybody," Yukio Okamoto, chairman of the prime minister's Task Force on Foreign Relations, said in an interview here on Monday. "We have to question: Why are we the only country in the world with inflated cost on our shoulders?" Japan's planned cuts are partly motivated by the nation's worsening financial condition. After a decade of economic stagnation, Japanese taxes will barely cover half of this year's nearly $700 billion budget. Bonds will be printed and sold to cover the rest. "Japan's fiscal situation is worse than Italy's," Mr. Okamoto said from Prime Minister Junichiro Koizumi's office. Moving on programs with weak constituencies, politicians have cut Japan's overall foreign aid budget over the last three years by 15.5 percent, or $1.3 billion. Last year, for the first time in recent memory, Japan ceded the title of world's largest donor of foreign aid to the United States. At the United Nations, Japanese officials say they are angry that the world body has failed them on two counts. First, they say, United Nations diplomats were happy to have Japan pay one-fifth of the budget but were never moved to take the basic diplomatic step of removing a clause from the United Nations' founding charter that describes Japan as a "former enemy" nearly six decades after the end of World War II. "The `enemy' clause — no Japanese can understand why the U.N. continues such symbolism," Mr. Okamoto said. Second, they say, Japan, which has the world's second-largest economy, has been frustrated in its bid to win a permanent seat on the United Nation's Security Council. "We should get a seat on the Security Council and abolition of the enemy clause in the U.N. charter," said Hatsuhisa Takashima, a Japanese Foreign Ministry spokesman. "No taxation without representation is the basic idea." Japan's $1 billion slice of the United Nations budget is more than the combined payments of four of five of the permanent members of the Security Council: Britain, China, France and Russia. Only the United States pays more. One United Nations official here said cutting support would not help Japan's Security Council bid, arguing: "If their quest is for the Security Council seat, it is not smart politics. They are not creating an image that Japan is a team player." Since hitting a peak in 2000 of 20.5 percent of the United Nations budget, Japan's share has dropped one percentage point. Now, Mr. Takashima said, the goal is to negotiate further reductions in this decade to reach parity with Japan's portion of world economic activity, 14.4 percent. Calling for moving from "money diplomacy" to "real contributions" Mr. Okamoto cited as an example of Japanese contributions the peacekeeping troops sent to East Timor. Samuel Koo, director of Unicef's office here, said cuts by Japan "would be extremely severe — they would send the wrong signals." Noting that Japan is to play host to a conference on African development in November, he added: "A lot of countries look to Japan. They follow Japan's initiative." Noting that Japan now pays 10 percent of Unicef's budget, he said, "From Unicef's point of view, funding cuts by Japan would be extremely severe." (by James Brooke)

From http://www.nytimes.com/ 01/22/2003

Tokyo Sees a Bold New Vision for Its Foreign Policy

In the 40 years since the signing of the US-Japan Security Treaty in 1960, Tokyo's foreign policy has been barely distinguishable from Washington's. Bound by its pacifist constitution, the role of an ever-more prosperous Japan was for years limited to bankrolling the foreign policy agenda of the US and its westernallies. But increasing financial strains at home, coupled with a growing belief that Japan needs to define its own national interest more clearly, has led some in Tokyo to urge more resolute foreign policy. In many ways, Junichiro Koizumi, the prime minister, has obliged. He has sent hundreds of peacekeeping personnel to East Timor, and logistical support including an Aegis destroyer to the Indian Ocean. That represents a deployment of foreign troops and hardware, albeit in a non-combative role, that would have caused uproar only a few years ago. Those moves have suited the US, which would like to see Japan play a more active role internationally, partly as a counterpoint to growing Chinese influence. But Mr. Koizumi has also taken some bold foreign policy steps without consulting Washington, most notably his surprise visit to North Korea last September - an initiative at least temporarily derailed by Pyongyang's subsequent nuclear revelations. There have also been rumblings in Tokyo about the possible renegotiation of agreements with Washington aimed at scaling back the overwhelming US military presence on the southern island of Okinawa. The intellectual underpinnings of these shifts are highlighted in a recent policy document, subtitled New Era, New Vision, New Diplomacy, prepared by a prime ministerial taskforce. The paper provides a fascinating glimpse into the possible future direction of Japanese foreign policy. In apreamble, the taskforce says Japan's principal task is to define its national interest in response to seismic international shifts: namely the rise of China, the changing security picture and what it calls economic globalisation. Japan has been loath to think in these terms, but "without a debate on national interest, it is impossible to set a course for the nation". The paper presents a resurgent China as Japan's biggest policy challenge politically and economically. The relationship, it says, inevitably "interweaves co-operation and coexistence with competition and friction". The taskforce calls for a more mature political relationship between the two. Both should "liberate themselves from an enchantment with history", it says, a reference to the war guilt that many argue has kept Japan on the diplomatic back foot for 50 years. Japan should for example, be bolder in its relationship with Taiwan, from which it has distanced itself for smoother relations with Beijing. It also urges the scaling back, or at least the more careful targeting, of official development assistance to China. Since 1972, when Japan and China normalised diplomatic relations, Tokyo has plied Beijing with aid in lieu of war reparations. But as China has started to challenge Japan economically, the policy has become less palatable at home. Economically, the taskforce says, Japan cannot respond to China head-on. As a manufacturing base, it has already lost. Instead, it must push through structural reform that will force old industries to rationalise and allow new 21st century ones to take hold. Internationally, it must deepen ties with east Asia, what it calls the "growth centre for the world economy". The eventual aim, it says, is to create a "borderless economic sphere", language that Japan has studi ously avoided for 60 years since it tried to achieve something similar with the help of the imperial army. Last year, Japan signed a free-trade agreement with Singapore. It is now negotiating similar bilateral deals with Thailand and the Philippines, though these would require Japan to make big concessions on agriculture and immigration. The real goal is a deal with South Korea. Along with diplomatic efforts in trade and economic integration should come greater assertiveness on security issues, the taskforce says. Japan's ability to deploy its army is famously so limited that tanks belonging to the self-defence force must stop at traffic lights. With US encouragement, Japan has begun to deploy its forces more imaginatively overseas. It has taken part in numerous peacekeeping operations and has stretched its logistical support of military operations to the constitutional limit. The taskforce wants to go further, advocating Japanese participation in collective security arrangements. Japan, for example, should have been allowed to dispatch non-combatant troops to the Isaf peacekeeping force in Afghanistan. Underlying the call for greater assertiveness is a belief that countries gain more influence through taking risks than waving a chequebook. Yukio Okamato, the cabinet adviser who headed the taskforce, says Japan's generosity has failed to win due international recognition. "Our past diplomacy, the idea that money alone can get you anywhere, was simply wrong." Mr. Okamoto's recommendations are far from becoming official government policy, and will be resisted by sections of the foreign ministry. But his ultimately damning verdict on Japan's post-war diplomatic record has clearly grabbed the prime minister's attention. (by David Pilling)

From http://news.ft.com/ 01/22/2003

New Privacy Bill Unshackles Media

A new version of a privacy-protection bill features an exemption clause for news media and professional writers and may thus ease concerns about restrictions on press freedom, according to a draft obtained Wednesday by Kyodo News. But the draft drew immediate fire from writer and artist groups. The bill is expected to be submitted to the Diet in February, with passage eyed before the mid-June end of the current session. When government ministers issue directives or recommendations on privacy protection, the bill states, they "shall not infringe on freedom of expression, freedom of study, freedom of belief or freedom of political activity." A previous bill that never made it out of the Diet stated ministers "shall give consideration" in order to avoid infringing on such freedoms. The revised version would exempt broadcasters, newspaper publishers, news agencies and other media organizations as well as professional writers and freelance journalists from certain restrictions and penalties. In the earlier bill, restrictions on acquisition and use of private information, along with punishment in the event of any violation, would have applied to all parties handling such information. A waiver on the penalty clause covered only media groups and not individuals engaged in journalism. A separate privacy-protection bill for administrative bodies, to be submitted alongside the general bill, is to carry a clause stating that employees of such bodies found to have disclosed or stolen private information with the aim of gaining inappropriate profit for himself or a third party would be subject to penalties, including prison terms and fines. The original bill for general application was quashed due to criticism from opposition parties and news organizations. The privacy-protection bill was initially conceived to address the increasing use of information technology. The bill was first submitted to the Diet in March 2001. Ai Nagai, head of the Japan Playwrights' Association, lambasted the new bill, saying it would allow government bodies to restrict freedom of expression. Nagai issued an appeal with four other national groups of writers and artists, claiming the bill could be interpreted arbitrarily, as it does not specify to whom it would apply and the grounds on which it would be applied. "This appeal is not only for the freedom of those who produce content, but also for those who consume it," Nagai told a news conference. "We want to deepen deliberations on the matter together with our audiences."

From http://www.japantimes.co.jp/ 01/23/2003

SOUTH KOREA: Seoul Selects 10 New Technologies

The Korean Agency for Technology and Standards (ATS) under the Ministry of Commerce, Industry and Energy (MOCIE) has announced this year's 10 new technologies developed by Korean companies. Of the 10, six were developed for the first time in Korea and the other four are world-class technologies. The six include Hyundai Heavy Industries's technology to load huge structures and float them on the high seas; Samsung SDI's organic el display device; LG Electronics' advanced digital TV system on chip; Will'tek's cdma2000 1x multi channel measurement technology; Hyosung's thinnest polyester yarn by direct spinning; CJ's production technology of an industrial amino acid, L-Threonine. Four other technologies include Korea Aerospace Industries' T-50 next generation trainer jet.

From http://www.seoulnow.net/ 12/27/2002

Fewer Babies, Migrating Couples Lead Local Government to Offer Cash in Hand

A local county recently announced it would grant 1 million won ($835) to any resident who bears a child, reflecting the nation's falling birth rate and associated social problems. Officials at the Cheongwon County government in North Chungcheong Province said a woman who delivers a baby will get 350,000 won in baby care materials like diapers and nursing bottles beginning this year. The county will also finance preventive inoculations for the babies. An additional 650,000 won will be provided in cash to people who farm for a living so that they can hire substitute workers, county officials said. "We drew up this plan because the number of babies in our county is plunging, more and more young couples are moving to the big cities, and we are turning rapidly into an aging society," said Yoon Jung-hee, an official at the county office. Yoon said the number of babies born in the county per year had decreased by an average of 100 for several consecutive years, dropping to around 1,200 last year. "We hope this plan will help attract young people to our region and encourage them to bring up more children," he said. It was the first time that a local government promised financial incentives to encourage childbirth. But officials said the nationwide drop in birth rates had already set alarm bells ringing. According to the National Statistical Office (NSO), a total of 557,000 babies were born in Korea in 2001, down from 637,000 in 2000. The comparable figures were 721,000 in 1995 and 739,000 in 1992. The average number of children per woman was just 1.3 in 2001, compared with 1.78 registered in 1992. The number of babies born per 1,000 people was 11.6, while the comparable figures were 14.7 in the United States, 14.6 in New Zealand, 13.1 in France, and 13 in Australia. Japan and Britain had lower rates of 9.3 and 11.4, respectively. NSO officials attributed the decrease of childbirth in Korea to the tendency among married couples to have fewer babies as well as their higher divorce rate. In addition, they said, people are getting married older than in the past, causing the rate to drop further. Analysts noted that the population shift caused by the falling birth rate and rising life expectancy settled in Korea in less than two decades, which they said is too short a period given that it has taken a century in other developed nations. Kim Seung-kwon, a researcher at the Korea Institute for Health and Social Affairs, pointed out that such changes took nearly 150 years in France and over 30 years even in Japan, whose social development most resembles Korea's. "It's the shortest period in the world. People in other countries had enough time to prepare for the changes, establishing social welfare networks and other necessary systems," Kim said. "But Korea didn't have time to get prepared, and there are concerns that such a fast shift will have a number of negative side effects," he added. (by Kim Ji-ho Staff reporter)

From http://www.koreaherald.co.kr/ 01/03/2003

Ministry to Ban Mobile Signal Jammers

The Ministry of Information and Communication (MIC) said yesterday that it will ban the use of "jammers" - or devices that jam mobile phone signals in public places - signaling that the government is taking the side of mobile phone users with regards to the issue of mobile phone usage in public places. Some libraries and theaters in Korea have installed jammers to prevent people from receiving and making mobile calls while in their facilities. The installation of such jamming devices, however, has sparked some controversy, particularly concerning potential civil liabilities and possible invasion of privacy issues. In fact, such devices are illegal in most countries, including the United States. The information ministry held a public forum about the issue and concluded that the usage of jamming devices should be prohibited as issues have arisen with regard to the technological soundness of the devices, as well as countervailing arguments that using such devices are an infringement upon one's constitutionally protected rights with regards to freedom of communication guaranteed by the constitution. The ministry's position was clarified in a report issued last month. The report, however, has left some leeway to allow for the reduction of public nuisances caused by sending and receiving mobile calls in public places. One of the ways suggested is to encourage people to switch their phones to an inaudible ring mode like a vibration mode, when entering a public place. The ministry adjudged that it is technologically sound and legally justifiable to employ technology that could automatically switch all mobile phones within the radius of a particular public place from an audible mode to an inaudible mode without the users' knowledge or permission. This particular method does not block signals while helping minimizing the disturbances of mobile handsets in such public places as theaters, cinemas and churches. Ministry officials said some of the jamming devices installed in certain libraries and theaters also blocks residents living nearby from receiving calls, a technological problem that has been found to be intolerable for those in such situations. Ministry officials said some local restaurants use jammers imported from overseas markets, but such devices are illegal under Korean law, adding that most advanced countries do not allow jammers that completely block mobile signals. Although the ministry has decided to ban jammers, the issue of mobile phone nuisance in public places has become a thorny issue in Korea. In advanced countries, jamming devices, which can block signals in rooms the size of a movie theater, have been in commercial circulation since 1998. Advanced countries, however, have laws prohibiting the usage of cell-phone signal jammers. The potential for civil liabilities for those who use cell phone signal jammers looms larger than life, and could have unintended social consequences as well. One scenario that is not altogether unlikely is the doctor who cannot respond to a life-threatening emergency via a page or call on his cell phone, because the public place he is in is secretly blocking his phone from receiving or making any calls. The mobile industry and regulators in Korea have also expressed opposition to legislation that would legalize indiscriminate jamming of phone signals. Ministry officials said they would also urge mobile carriers to operate wireless etiquette programs as an alternative way of resolving conflicts arising from widespread mobile phone usage. (by Yang Sung-jin)

From http://www.koreaherald.co.kr/ 01/03/2003

Regulators to Crack Down on VDSL Marketing

Korea Communications Commission (KCC), the country's top telecom regulator affiliated with the Ministry of Information and Communication, said yesterday that it will crack down on any illegal marketing in connection with a new high-speed Internet access service. KCC said that it has received a host of complaints alleging violations of regulations regarding the so-called VDSL (very high bit rate digital subscriber line) Internet access service that is expected to replace existing ADSL services. KCC sources said that many complainants have expressed concerns about telecom giant KT Corp., which recently kicked off its VDSL service and staged massive marketing campaign. KT is allegedly recruiting VDSL subscribers by offering a service package that exempts users from the initial sign-up fee. The exemption of the initial sign-up fee is illegal under the current telecom regulations. KT's rival, Hanaro Telecom Inc., is also expected to launch a commercial version of VDSL service within this month, raising the possibility that competition will further intensify. The two firms recently clashed with each other over a comparison advertisement for the fledgling VDSL high-speed Internet access service. The ongoing competition between KT and Hanaro follows the steady saturation of ADSL-based Internet access market. The number of broadband subscribers surpassed the 10-million mark late last year, one of the highest in the world, but carriers are now concerned about the slower growth. (by Yang Sung-jin)

From http://www.koreaherald.co.kr/ 01/03/2003

Chinese Characters to Be Replaced in Legal Codes

The Ministry of Legislation said yesterday it will change all Chinese characters in legal codes into Korean. The ministry reported the plan to President-elect Roh Moo-hyun's transition team yesterday. "By freeing the legal codes of Chinese characters, we hope to provide people with a better understanding of the law," said a ministry official. "We will use Chinese characters in parentheses only when we need to clarify the meaning of words." The ministry plans to complete the switch before Oct. 9, the national commemoration day for hangeul, the Korean alphabet. (by Kim Tong-hyung )

From http://www.koreaherald.co.kr/ 01/08/2003

'No Shock Therapy' on Chaebol Reform

President-elect Roh Moo-hyun is to press ahead on a long-term basis with a set of new policies on business groups, empowering the business sector for the implementation of such policies. As such, the new government will not resort to shocking or arbitrary methods, said Kim Jin-pyo, vice chair on the Roh presidential transition committee, on Wednesday. Speaking to reporters, Kim said that the president-elect does not think that the new government will have to hurry in implementing the proposed policies, as almost all of the economic reform policy proposals by the committee are subject to approval by the National Assembly. In particular, Kim said that proposals for reforming the business sector have not been aimed at specific chaebol, and that the new government would not punish certain business groups. On the proposed introduction of an all-inclusive tax law and the mandatory spin-off of problematic financial subsidiaries of chaebol groups, the president-elect believes that he needs the full consultation of the business sector and experts to pass his proposals. The groups will have much time to analyze the proposals, said Kim. (by Yoon Young-shin)

From http://english.chosun.com/01/08/2003

Roh, Business Community Clash over Chaebol Policy

President-elect Roh Moo-hyun and the nation's biggest family-owned conglomerates - the chaebol - are in conflict over the incoming administration's policy to reform them. Roh, who once called for the dismantling of the chaebol and the creation of a "workers' paradise" during his opposition days, has put chaebol reform high on his presidential list of tasks that he has vowed to carry out over the next five years. In his first post-election news conference, the former labor lawyer and advocate of human rights reaffirmed his commitment to restructuring the chaebol to rein in on their undue influence over the economy. "Large corporations are essential for economic growth but we need to reform the inefficient chaebol system," Roh said after his Dec. 19 election victory. Roh's comments has sparked speculation that his administration would lead a strong drive to reform the chaebol, which some critics say are undermining Korea's global competitiveness due to their over-expansion and iron grip on the economy as a whole. The chaebol-dominated economic system, some critics argue, was responsible for the country's 1997-98 financial crisis. The chaebol and their advocates, however, dismiss such claims as groundless. The largest Korean chaebol are Samsung, Hyundai, LG and SK groups, which are all heavily diversified in that they own and operate a wide-range of businesses and subsidiaries specializing in everything from heavy and light manufacturing to information technology to services. Roh's position on chaebol reforms understandably does not bode well with the family-owned conglomerates themselves, especially after a member of Roh's transition committee suggested the chaebol abolish their so-called "restructuring headquarters" which analysts allege are nothing more than thin guises used by chaebol owners to exert crony influence on the management of subsidiaries, as well as operating as think tanks for finding legal loopholes in the tax code in order to circumvent tax law, or avoid paying inheritance and gift taxes. The committee member's position, which is seen by the chaebol and their supporters as "radical," has prompted Sohn Byung-doo, vice chairman of the Federation of Korean Industries (FKI) - a major chaebol lobbying group - to openly criticize Roh's chaebol policy. "It is wrong for the incoming government to talk about the shutting down chaebols' restructuring headquarters," Sohn said on a radio talk show recently, further expressing strong concerns about Roh's plans to clamp down on chaebol. Kim Chung-ho, vice president of the Center for Free Enterprise (CFE), a pro-chaebol think tank, said Roh's new administration is more likely to focus more on trying to regulate the chaebol than improving the free market system. "Roh's anti-chaebol measures will eventually be a disadvantage for the whole economy by discouraging business activities," Kim said. "The government should help the chaebol restructure themselves on their own - not force them to do so." Civic groups, however, contend that the incoming government should push ahead with plans to reform the chaebol in order to help the economy become more competitive and prevent the concentration of wealth in a few conglomerates. "Roh's reform promises are necessary because local conglomerates lack managerial and accounting transparency," said Kim Sang-jo, head of the participatory economic committee of People's Solidarity for Participatory Democracy (PSPD), an anti-chaebol civic group. "Opposition to the proposed reform measures is tantamount to leaving the chaebol as they are." In an attempt to calm the chaebol, Roh and his aides are making strides in softening their stance by saying that they wouldn't introduce any "shocking" corporate reforms or plans. During a meeting with big business leaders on Dec. 3, the president-elect stressed the incoming government's chaebol policy will be in line with that of the incumbent government. "There will be no major changes with regards to restructuring, and I will not be administering 'shock therapy' (to the business community)," Roh said. In a conciliatory gesture, Roh's transition committee also said Wednesday that the new administration will not force reform on the chaebol, but instead encourage them to adopt reforms on their own in a market-friendly manner. "I reiterate that there will not be any shocking measures or forceful methods (regarding economic reform)," said Kim Jin-Pyo, vice head of the presidential transition committee. Roh stressed the need to give chaebol sufficient time to react to possible changes stemming from the incoming government's long-term economic policies. "Only after forming a national consensus and hearing various opinions will the new government be able to establish chaebol reform-related laws," Roh said. In regard to local press reports that the next government's policies are targeting Samsung Group, Kim said it was "unimaginable" to think reforms would be directed at any specific company. Despite these announcements, members of the business community are still concerned that Roh will continue to push for drastic anti-chaebol measures during his five-year term. One of the measures on the Roh's transition team's drawing boards is to introduce a law allowing class action suits by investors against brokerage firms, exchanges or investment management companies in stock price manipulation cases, false public disclosures by listed companies, and window dressing - or the deceptive practice of using accounting tricks to make a company's balance sheet and income statement appear better than they really are - which would be a measure aimed at protecting minority shareholders' rights. A bill on class action suits, submitted by Kim's administration, failed in the past to pass the opposition-controlled National Assembly. Roh also wants to adopt the so-called "all-inclusive" taxation system that will impose taxes on all types of inheritance and gifts, without specifying such types by law. Currently, the tax authorities can impose taxes only on 14 government-specified types of inheritance and gifts, which encourages wealthy taxpayers to seek loopholes in order to avoid paying them. The new taxation system is particularly aimed at preventing the illegal transfer of wealth from chaebol owners to their children, "The all-inclusive taxation system does not violate the Constitution," Roh told reporters recently, adding he will even consider a revision in the Constitution to implement it if necessary, Some legal experts, however, say that it is against the basic principle of taxation to impose any taxes without specifying their types by law, which could eventually lead to the abuse of power by tax authorities. They also say it is contrary to global standards to increase inheritance and gifts taxes, noting that advanced countries like the United States are moving to abolish such taxes to encourage people to save and work more, thereby relying less on receiving inheritances. "It does not guarantee that raising inheritance and gifts taxes will reduce the transfer of wealth to the younger generation because people will try harder to find out ways to get around them," said Chun Seung-hoon, vice president of the state-run Korea Institute of Public Finance (KIPF). "Although they are not laid out clearly yet, Roh's taxation policy in general sound a little unrealistic." Meantime, the Ministry of Finance and Economy told Roh's transition team early this week that it will work to adopt Roh's new taxation system on inheritance and gifts by the end of this year, adding there wouldn't be any major legal difficulties to do so. Another anti-chaebol measure is to place limits on the chaebol's total asset investments in their own affiliates and other companies up to 25 percent of their net worth, the official said. Under the new regulatory framework unveiled by the Fair Trade Commission (FTC) in April last year, 18 business groups with assets exceeding five trillion won are banned from purchasing and holding stakes in their affiliates and other companies in excess of 25 percent of their combined net assets. The agency also prohibits the 43 business groups with assets exceeding 2 trillion won from making mutual investments among their affiliates and from providing debt guarantees for these affiliates including the 18 groups already cited. The FTC said recently that it plans to maintain the current regulatory framework for large conglomerates, while reducing exceptions to such a framework. Roh's transition team also plans to limit chaebol's ownership of non-bank financial institutions in instances where those institutions were found to have served as chaebol's private cash vaults as well as nullify the voting rights of shareholders that are held by chaebol-affiliated non-bank financial institutions, including securities, insurance and investment trust management companies. The financial institutions are currently allowed to exercise the voting rights for shares they purchased on behalf of their customers, raising criticism about using customers' money to serve the interests of their umbrella groups. The government allowed the voting rights of such shares in 2001 due to chaebol's strong lobby. Moreover, the transition team is also considering empowering the FTC to investigate chaebol for illegal activities such as collusion and illegal insider trading among subsidiaries. The watchdog submitted a bill to the National Assembly last year to obtain such judiciary power, which was rejected due to the strong objection from the Ministry of Justice. Roh's administration, however, will find implementation of new measures and reforms easier said than done, as endorsement of their reforms are required by the pro-business opposition party, the Grand National Party (GNP), which holds sway in the National Assembly. "Most of Roh's new regulations will have to face stiff opposition from the majority party in the National Assembly, as well as the chaebol themselves and the chaebol lobby," said PSPD's Kim who also teaches economics at Hansung University in Seoul. (by Sim Sung-tae Staff reporter)

From http://www.koreaherald.co.kr/ 01/10/2003

N. Korea Withdraws from NPT

North Korea announced yesterday its withdrawal from the nuclear Nonproliferation Treaty (NPT) but claimed that it had no intention to develop nuclear weapons. The North's foreign minister, Pa Nam-sun, sent a letter to the U.N. Security Council stating that the withdrawal takes effect Jan. 11, according to a North Korean news agency. The North's announcement dampened hopes for the resumption of official talks between Pyongyang and Washington, although Bill Richardson, former U.S. ambassador to the United Nations, began meetings late Thursday with North Korean representatives to the United Nations to discuss the nuclear standoff. "The government of the DPRK (North Korea) in a statement today declared its withdrawal from the Nuclear Nonproliferation Treaty and its total freedom from the binding force of the safeguards accord with the International Atomic Energy Agency (IAEA)," said a North Korean statement carried by its official Korean Central News Agency (KCNA). "Though we are pulling out of the NPT, we have no intention to produce nuclear weapons and our nuclear activities at this stage will be confined only to peaceful purposes such as the production of electricity," it said. The South Korean government convened an emergency National Security Council meeting yesterday and urged the North to immediately retract its action. "We cannot contain our worries and disappointment over the North's move, which have been taken at a time when the South Korean government and the international community are making all-out efforts to seek diplomatic solutions to the North's nuclear issue," a Foreign Ministry spokesman said in a statement. The government also promised to continue consultations with other relevant countries as well as the International Atomic Energy Agency (IAEA) to resolve the issue peacefully. President Kim Dae-jung said that the situation has deteriorated but that he believes the issue should be settled diplomatically and through talks between the South and the North. President-elect Roh Moo-hyun expressed "strong regrets" about the North's action and called on it to reverse its decision. The North's latest action is seen as a brinkmanship tactic to pressure Washington into resuming diplomatic negotiations at an early date and into offering some concessions, government officials and analysts here said. "The North revealed the decision in order to pressure the United States to come to the negotiation table, rather than actually intending to quit the nuclear arms control pact," a senior government official said. He added that the North's latest action "will not affect Washington's will to open talks with North Korea because the United States as well as South Korea had expected that the North would take this follow-up action." North Korea has ratcheted up its nuclear threats in recent weeks, taking steps to reactivate its nuclear facilities, frozen under a 1994 pact with Washington. The North has said it decided to restart its nuclear program in retaliation to the U.S. refusal to continue its energy supplies last month in order to punish the North for harboring a uranium-enrichment scheme for nuclear bombs. "The withdrawal from the NPT is a legitimate self-defense measure taken against the U.S. moves to stifle the DPRK (North Korea)," the North Korean statement said. The North, which joined the NPT in 1985, had previously announced that it was withdrawing from the treaty in March 1993, which triggered a nuclear crisis on the Korean Peninsula. Pyongyang suspended the withdrawal three months later when the United States agreed to begin dialogue with it. The United States, which once considered conducting a military strike on the North's facilities, struck a deal in 1994, under which the North froze all its nuclear development programs in return for the provision of safer light-water nuclear reactors and interim fuel supplies. (by Seo Hyun-jin)

From http://www.koreaherald.co.kr/ 01/11/2003

President-elect to Start Receiving Policy Briefings Jan. 20

President-elect Roh Moo-hyun will receive joint briefings Jan. 20-Feb. 10 from cabinet ministers on key policy issues, starting from the heads of economy-related organizations, his spokesman said yesterday. The two-stage briefing session will be conducted based on Roh's recently proclaimed policy goals and includes making tours to five major cities, said Jung Soon-kyun, spokesman of the transition team. Jung said during the session's initial stage to be held Jan. 20-23, Roh will receive briefings from government ministers on the economy, society, culture and women's issues and political affairs, who will be grouped together in accordance with the president-elect's policy guidelines. "On the first day of the briefing, Roh said he wants to be briefed on the economy, the most pending issue," Jung said. Roh plans to make a visit to Busan, Daegu, Gwangju, Daejeon and Incheon during the second stage Jan. 27-Feb. 5 to receive briefings related to his crucial policy goal of "decentralization and regionally balanced development," Jung said. "In terms of his goal of attaining 'peace on the Korean Peninsula,' Roh said briefings will take place regardless of schedules, because North Korea's nuclear issue is at the fore," the spokesman said. The transition team also added two more policy lines to its 10 top goals to be implemented over the next five years, Jung said. They are the "establishment of new labor-management relations" and "working out measures for farmers and fishermen in the era of globalization." Meanwhile, Roh said he would direct a reshuffle of the heads of public firms under the principles of "efficiency, public role and reform." The president-elect will classify candidates for the heads of public firms according to their positions and the organizations they work for, in order to choose more reform-oriented individuals after conducting competitions among them, Jung said. Roh also said there is no change in his official position to choose a prime minister-designate "who can maintain stability and equilibrium in managing state affairs." A day earlier, a reporter quoted Roh as hinting that he would name a "reform-minded and clean" nominee for prime minister, countering media reports that Goh Kun, a career administrator who served as prime minister and Seoul mayor, is the strongest candidate for the post. "I picked up the phone when the reporter called me, as there was no one else at home," Roh said, adding that he tried to discuss the results of opinion polls on the kind of person the next prime minister should be. Roh's transition team requested that journalists not make direct telephone calls to the president-elect. (by Kim Hyung-jin Staff reporter)

From http://www.koreaherald.co.kr/ 01/14/2003

Roh to Move Forward with Political Reform First

A high-ranking official of the ruling Millennium Democratic Party (MDP) is expected to unveil during a meeting of the Korea-United States Business Council due Monday in Hawaii a policy platform of President-elect Roh Moo-hyun. The platform is to push ahead with political reform first, which is to be followed by completing the economic restructuring that began under Kim Dae-jung. Sources said that Kang Bong-kyun, a ruling party member who will represent the Korean government at the meeting, would deliver a keynote speech in which he is to outline the policy guidelines of the president-elect. In the speech, Kang, former minister for Finance and Economy, is expected to point out that Roh believes that the economic reform policies Kim Dae-jung government put forward after the 1997 financial crisis ran out of steam because politicians failed to change in response to it, and that therefore, Roh would give top priority to political reform. In detail, Kang is to say that the new Korean government will separate chaebol groups' financial units from their sister firms, to enhance corporate transparency, and will also allow class-action lawsuits, to boost competition at the share markets. The former finance minister will also stress that Roh is to press ahead with the introduction of an all-inclusive tax system, to stem irregular inheritance and donations. (by Cho Hyun-rae)

From http://srch.chosun.com/ 01/19/2003

Gov't Checks Inflation Ahead of Lunar New Year Holiday

The government is setting up emergency measures to keep inflation under control, ahead of the Lunar New Year's holiday season spanning from January 31 to February 2. The Ministry of Finance and Economy said on Sunday it is trying to curb rising consumer prices by expanding the release of major agricultural products and keeping public and private service charges in check. Officials say they are also discouraging oil companies from raising gas prices. The Lunar New Year season usually pushes up agricultural and fisheries prices, as Koreans nationwide prepare traditional dishes for ancestral rites and get-togethers for extended family members.

From http://srch.chosun.com/ 01/20/2003

Seoul Plans Policy to Keep Urban Areas Green

The new government is planning to implement a comprehensive policy aimed at preserving natural environment in urban areas. The move comes as eased rules on greenbelt areas, special zones designated to control urban sprawl diminish greenery in cities. Authorities are also looking into introducing policies to reduce land and air pollution. They include launching a pollution evaluation system and requiring large vehicles to install filtering devices to absorb exhaust fumes. These are some of the plans being reviewed by the Presidential Transition Committee following a briefing by the Environment Ministry.

From http://srch.chosun.com/ 01/20/2003

Economic Blueprints for Roh Administration Drawn Up


President-elect Roh Moo-hyun was briefed by leading economic officials on policy proposals, providing a window on the likely direction policy will take once Roh takes office next month. Insiders said the Roh administration will offer a consolidated tax payment system for conglomerates after various restructuring moves are carried out. Those moves include the introduction of a securities-related class-action lawsuit system, an all-inclusive taxation rule for donations and inheritances and tougher external director requirements. The new administration is also expected to adopt a new cartel realignment policy designed to curb price fixing and strengthen consumer rights, including boosting compensation for consumers seeking redress. The officials who met with President-elect Roh Moo-hyun came from agencies such as the finance and budget ministries, the Korea Fair Trade Commission and the Financial Supervisory Commission. The chairman of the trade commission, Lee Nam-kee, said in the session that the antitrust watchdog would make the rules limiting conglomerates' cross-equity investments more efficient, maintain the current ban on cross-subsidiary equity investments and loan guarantees, and work out measures to stem the chaebol's encroachment into the financial market. Deputy Prime Minister Jeon Yun-churl said in the session that the government would consider introducing the so-called "consolidated tax payment system" for business groups. The new rule would call for a group to pay taxes on the combined income of its parent and subsidiaries, in contrast to the current system, which assesses taxes separately on each part of the group. The new system would substantially cut the tax bills of business groups that have many subsidiaries, insiders say. Jeon also said that the government will soften the policy limiting new production plants in Seoul and Gyeonggi province in order to reactivate corporate investment in the regions.

From http://srch.chosun.com/ 01/21/2003

First Plenary of 9th Inter-Korean Ministerial Talks Ends

SEOUL, -- South Korea on Wednesday urged the Democratic People's Republic of Korea (DPRK) to rescind its recent decision to drop out of the Non-Proliferation Treaty (NPT). In the first plenary of the Ninth Inter-Korean Ministerial Meeting held here earlier Wednesday, South Korean delegation conveyed global concerns about the nuclear issue, and called upon the DPRK to take concrete measures to have dialogue with the United States. 　"We made it clear that the consequences of the nuclear issue will lay negative influence to the inter-Korean relationship in the long run if it is not dealt with at the earliest date," said Rhee Bong-jo, spokesman of the South Korean part for the talks, at a briefing after the plenary. South Korean chief negotiator Jeong Se-hyun, who is also the country's Unification Minister, reiterated his government's stance of opposition to the DPRK's development of nuclear weapons, adding the nuclear issue should be addressed peacefully through dialogue,Rhee said. But, according to Rhee, the DPRK delegation headed by Kim RyongSong repeated that the nuclear issue should be discussed between Pyongyang and Washington, not between South Korea and the DPRK. Kim reiterated that his country "has no intention of developing nuclear weapons, and its nuclear activities will be limited to peaceful goals such as electricity generation." The DPRK chief delegate also indicated that the menace to peace on the Korean Peninsula "does not stem from the inside but from the outside." Kim also stressed the importance of fulfilling the joint declaration issued at the South-North summit between Kim Dae-jung and Kim Jong Il in 2000. Apart from the nuclear issue, the reconstruction of inter-Korean railways and roads across the demilitarized zone (DMZ) and steps to fulfill series of agreements on the development of a DPRK special industrial zone in Kaesong and safety in maritime navigation, and travel and cargo shipments were also included in the agenda. 　　Wednesday's meeting was the first formal contact between the two sides since the nuclear issue was escalated by a US-led international group's decision to suspend heavy oil provision to the DPRK along with a set of the DPRK's moves to resume its frozen nuclear facilities and pullout from the NPT. The two delegations will continue to hold a general meeting later Wednesday to discuss various issues of mutual concern. The Ninth Inter-Korean Ministerial Meeting will last to Friday.

From http://news.xinhuanet.com/01/22/2003

Koreas Agree to Seek Peaceful End to Nuke Crisis

South and North Korea yesterday agreed to seek a peaceful end to the nuclear crisis, but Seoul admitted the results fell short of its hope of winning a major concession from Pyongyang. Capping off four days of talks, the two sides released a joint news release for the ninth ministerial meeting during the second plenary session at 5:40 a.m. yesterday. ``South and North Korea fully exchanged their views on the nuclear issue and agreed to cooperate actively in resolving the issue peacefully,’’ it said. They also pledged to continue to abide by the June 15 Joint Accord signed by leaders of the two Koreas in 2000. The two sides agreed to hold the next ministerial talks April 7-10 in Pyongyang and an additional round of economic talks Feb. 11-14 in Seoul. While the accord on nuclear issue _ coming despite Pyongyang’s initial reluctance to broach the subject _ was a bonus for Seoul, officials here voiced disappointment. ``South Korea has not produced a more advanced position from the North on the nuclear issue, but we fully delivered our, and the international community’s, concerns,’’ said Rhee Bong-jo, Seoul’s spokesman for the talks. He said the South Korean delegation pressed the North to take action to back up its claim that it will not make nuclear weapons, urging it to abandon its nuclear program and revoke its withdrawal from the Nonproliferation Treaty. But North Korea balked at the suggestion, Rhee said, maintaining its stance that the issue should be resolved through dialogue with the United States. Still, the official lauded the North on its decision to include a peace resolution in the news release. ``What is meaningful is the North’s willingness to continue peaceful efforts,’’ he said. The ninth ministerial talks produced few results on the inter-Korean cooperation and exchange projects. The joint statement affirmed the principle that they will continue the existing projects for common benefit. Officials said they expected Pyongyang to change its position on the border crossing issue hampering the projects after Seoul explained its stance. ``Due to the North’s basic position that the nuclear issue is between Pyongyang and Washington, the talks yielded little _ as was expected,’’ remarked Prof. Koh Yoo-hwan, who teaches North Korean studies at Dongguk University in Seoul. ``But at least the South and North have clarified their positions.’’ The North Korean delegation, led by senior Cabinet councilor Kim Ryong-song, left the Sheraton Walker Hill Hotel in eastern Seoul at 8:50 a.m. and flew back to Pyongyang via Beijing.

From http://times.hankooki.com/ 01/24/2003

Outdated Laws Stifle Financial Firms

Most policymakers and academics are crying out in unison that it is time to reform Korea’s financial legal system so as to meet changes in the financial industry and boost the growth of the local financial market. They point out that financial services providers, including banks and insurance companies, are diversifying their businesses through consolidation and alliances, but related laws and regulations remain unchanged. They say that despite the demolition of business barriers in the financial market, there are still many duplicate laws controlling financial markets and transactions that prevent markets from functioning properly. Currently, there are 42 laws governing financial services companies, including banking, insurance and securities industries, under which 43 enforcement ordinances and 27 detailed enforcement regulations exist. The problem is that a lot of laws and regulations are overlapping and in conflict with each other as new, combined financial operations and products are developed in the market place For example, Financial Holding Company Law runs counter to Banking and Insurance laws. Given that financial holding company commands banking, insurance and securities subsidiaries, the consolidation of related laws into one is inevitable. For these reasons, the Ministry of Finance and Economy (MOFE) reported on Tuesday to President-elect Roh Moo-hyun’s presidential transition team that the government should shift to a function-centered legal system from the current industry-oriented legal framework. The MOFE is now considering a plan to either consolidate 42 financial laws into one unified legal scheme or simplify them into three or four sectors based on operations _ establishment, transaction, asset management and liquidation. The current industry-oriented financial legal system is classified into three major categories _ banking act, insurance act and securities act. The MOFE said the current industry-based legal system is against the recent trend of the consolidation and diversification, and is preventing independent activities by financial services companies because each industry law bans other industries’ entry. An MOFE official said that the consolidated legal system will effectively control the diversified financial industry. For instance, once``bancassurance,’’ the selling of insurance at banks, is introduced, MOFE had to introduce a new law because the new operation has characteristics of both banking and insurance businesses. Yoon Myun-shik of the Bank of Korea said in a situation where fire walls between different financial services companies are being torn down, it is not proper to control banking business with only the banking act. The MOFE official also said that the new legal system will enable each financial services providers _ banking, insurance and securities _ to deal in operations with less interference and under eased regulations. ``If financial markets change, legal and regulatory systems should follow the trend,’’ Kim Woo-jin, a research fellow at the Korea Institute of Finance (KIF). He added that the failure of the Financial Supervisory Service’s efforts to consolidate its supervisions was due to separate laws governing different types of financial services. Market experts said that there is increasing legal uncertainty in the local financial market as the outdated legal framework failed to control new types of transactions and products, such as bancassurance. Kim Kon-sik, head of the financial law research center at Seoul National University, which is now reviewing the introduction of the new financial law at the request of MOFE, said that the present legal framework is lagging, despite the growing need for legal support for new financial market and products. ``New derivative products and other new types of financial transactions are produced almost daily, but the financial law system has remained untouched,’’ Kim told The Korea Times. ``The current legal framework is hampering the growth of the financial industry.’’ Kim voiced concerns that a high degree of legal uncertainty could impede proper functioning of the financial market, in an open, fair and competitive way. Furthermore, experts said that under the current legal system it is impossible to make Seoul into a global financial center because market participants are reluctant to engage in transactions here due to such uncertainties. At a seminar held by Seoul Financial Forum on Tuesday, Byeon Yang-ho, director general of MOFE’s financial policy bureau, said that the MOFE will try to complete the reform of financial legal system within the next five years. According to KIF, most European nations, including Britain, have already adopted the function-centered law system and America introduced a Financial Modernization Act in 1999 in a move to support the consolidation of financial industries. Japan established a Financial Law Board, consisting of Japanese attorneys and scholars who specialize in financial law, in 1998 to solve legal uncertainties that may cause practical difficulties in promoting financial transactions. (by Kim Jae-kyoung)

From http://times.hankooki.com/l 01/24/2003

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INDONESIA: Govt to Give Tax Cuts, Incentives for Businesses

The government will provide a tax cut facility and other incentives to the business sector as compensation for the increase in utility rates. The incentives were promised by Minister of Finance Boediono during a meeting between business leaders and Vice President Hamzah Haz and other senior economic ministers on Wednesday afternoon. Boediono said that the tax office was considering reducing luxury tax on some 20 product items. "This is a fairly good signal although it is not our primary demand. What we fought for is for the government to cancel the utility rate' hikes," Sofjan Wanandi, a businessman and chairman of the National Economic Recovery Committee (KPEN), told The Jakarta Post after the meeting. He said that among the 20 product items were televisions, mobile phones, food and beverages, most of which were no longer considered luxury items. Some 150 businessmen under the Indonesian Chamber of Commerce and Industry (Kadin), a powerful business lobby, participated in the meeting, which was also joined by Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti, Coordinating Minister for People's Welfare Jusuf Kalla, and Minister of Energy and Mineral Resources Purnomo Yusgiantoro. In a press conference prior to the meeting, Kadin chairman Aburizal Bakrie said that in addition to calling for a cancellation in the increase in utility charges, the businessmen were also seeking incentives from the government to help the business sector, hit by various uncertainties and problems at home. The government raised fuel prices, electricity rates, and telephone charges earlier this month as part of efforts to cut expensive subsidies and help ailing state-owned utilities. But many businesses have complained that the price hikes would cause production costs to increase and create difficulties for them amid the weakening purchasing power of consumers. During the meeting Dorodjatun told the businessmen that the government could not delay or cancel the increase in utility rates especially now that the government was close to meeting with the country's traditional foreign donors grouped under the Consultative Group on Indonesia (CGI), which will convene in Bali on Jan. 21. He added that the policy was part of a program made in agreement with the International Monetary Fund before the country could end the Fund's economic program at the end of 2003. The government's planned incentives were announced a day before a joint demonstration planned by workers and employers in Jakarta, which will be the largest demonstration since the protests started three days ago. Sofjan said that the joint rally would still take place despite the promised incentives. Elsewhere, Sofjan said that the government also promised to cut bureaucratic procedures at the custom's office to allow export-oriented industries to be able to get a refund within seven days on the duties they paid when importing raw materials. Currently most companies have to wait too long to get the refund, costing them potential interest on the funds. Furthermore, the government and the businessmen will set up a joint task force chaired by Dorodjatun and Jusuf to identify problems that have created a high cost economy. This includes the elimination of illegal levies charged by corrupt bureaucrats and hoodlums. The government, said Sofjan, had also decided to allocate some Rp 10 trillion worth of funds from the state budget to finance an economic stimulus program. The funds would be channeled into fisheries, agriculture and manufacturing. Details of the compensation and list of high cost items will be discussed further on Friday by the team. (by Rendi A. Witular and Fabiola Desy Unidjaja)

From http://www.thejakartapost.com/ 01/09/2003

Govt to Introduce Tax Break Facilities for Exporters

The government will introduce a second fiscal stimulus package for export-oriented industries to help lessen the impact of the recent utility price hikes, Minister of Trade and Industry Rini M. Soewandi said on Friday.The first stimulus package, announced on Thursday, mostly benefits electronics manufacturers. "We're now in discussions with the Directorate General of Taxation to determine the next stage of the package. We're now assessing what kind of efforts on our part can be made to jack up exports," Rini told reporters following a meeting with other senior economic ministers. She declined to provide details, but said that the package would be in the form of tax incentives to help local exporters improve their competitiveness overseas. The government is working hard to push exports this year in a bid to contribute more significantly to economic growth, which for the past two years had been mainly driven by domestic consumption. But exporters have said that tax incentives were not what they needed most to boost competitiveness. For instance, textile and shoe industries have centered their complaints on rampant illegal levies, the steady increases in utility prices, security problems and lingering labor disputes here. Textile producers and shoe manufacturers are traditionally two of the country's top non-oil and gas export earners. While illegal levies are causing high production costs and thus lessening their competitiveness, security and labor issues create fears among foreign buyers that local firms will not be able to meet delivery schedules, prompting them to seek alternative suppliers in other countries like China and Vietnam. The first fiscal stimulus package, worth around Rp 6 trillion (US$660 million), is also aimed at helping businesses cope with the rising production costs triggered by the simultaneous increase in the price of fuel products, electricity and telephone charges. The elimination and reduction of luxury tax on some 45 product items, mainly electronics, will also help reduce the cost of the products, which in turn would enable them to compete with cheaper smuggled products. It will also help increase domestic demand. Many businessmen have long complained that electronics smuggled into the country were hurting their businesses at home. Chairman of the Indonesian Electronics Association (Gabel) Lee Kang Hyun welcomed the stimulus package, saying that it would help curb smuggling activities and entice new investment in the local electronics sector. "The new rule is very good," Lee told The Jakarta Post on Friday. But the local soft drink industry is not happy with the policy because soft drinks were excluded from the luxury tax breaks. The industry has argued that there is no reason to impose luxury tax on soft drinks because the product should no longer be considered a luxury item. Gendol Taruna, an executive at the Association of Soft Drink Manufacturers (ASRIM), said that they would continue to lobby the government to get tax breaks. Some economists were doubtful the stimulus package would be able to curb smuggling and lure new investments. "The goal of the policy is not clear," said Umar Juoro, an economist from the Center for Information and Development Studies (Cides). He said that without serious efforts to curb illegal levies and corrupt practices, it would be hard to attract new investment. Tax breaks under first stimulus package Items to be exempt from luxury tax: 1. Packaged tea; 2. Cellular phones; 3. Wireless modems; 4. Wireless phones; 5. TVs measuring up to 21 inches; 6. Washing machines with a maximum capacity of six kilograms; 7. Refrigerators with a maximum capacity of 180 liters; 8. Air conditioners with a maximum of 1 PK; 9. VCRs, VCDs and DVDs with a retail or import price below Rp 1 million; 10. Audio players; 11. Telephone answering machines; 12. Magnetic band recording gadget in audio players; 13. Cameras with a retail or import price of up to Rp 500,000; 14. Hair dryers; 15. Hand dryers; 16. Toys; 17. Video games; 18. Lenses, mirrors, optic elements and camera equipment; 19. Single and double-eye binoculars, and optic telescopes; 20. Vacuum cleaners, electric floor polishers and garbage crushers; 21. Microphones, headphones, earphones, loudspeakers and amplifiers; 22. Steel sanitation goods, such as sinks; 23. Kitchen and dining utilities and decorative furniture Items to benefit from a reduction in luxury tax: 1. Luxury tax on VCRs, VCDs and DVDs with a retail and import price above Rp 1 million will be reduced from 20 percent to 10 percent. 2. Luxury tax on radio cassette players with a retail and import price above Rp 1 million will be reduced from 20 percent to 10 percent. 3. Camera film, from 20 percent to 10 percent. 4. Cameras with a retail or import price above Rp 500,000, from 20 percent to 10 percent. 5. TVs measuring 21 inches to 42 inches, from 30 percent and 20 percent, respectively, to 10 percent. 6. TVs measuring above 43 inches, from 40 percent and 50 percent to 20 percent. 7. Washing machines with a six kilogram to 10 kilogram capacity, from 20 percent to 10 percent. 8. Other video cameras and digital cameras, from 20 percent to 10 percent. 9. Air conditioners with a capacity of between 1 PK and 2 PK, from 20 percent to 10 percent.

From http://www.thejakartapost.com/ 01/11/2003

MALAYSIA: Malaysia to Reform Law on Goods Movement Via Ocean Transport

Malaysia will reform a law on the movement of goods through ocean transport to keep it up-to-date with changing situations, a Marine Department senior official said. Deputy director-general captain Ahmad Othman said the existing Carriage of Goods by Sea Act (Cogsa) is based on the Hague Rules established in 1924.He said the draft of the new Bill has been prepared by the Marine Department, and will be tabled at Parliament later. Ahmad was speaking to reporters at the sidelines of a conference on “Intra-Asean Shipping and Port Development” in Kuala Lumpur yesterday. The one-day conference was jointly organised by the Maritime Institute of Malaysia (Mima) and Global Maritime Ventures Bhd. Earlier, Marine Department director-general Raja Malik Saripulazan said Malaysia has to do some catching-up regarding Cogsa as the Hague Rules or the Bill of Lading is outdated and inadequate to meet the modern conditions of carriage .“The Hague Rules is outdated and supportive of an international economic system that is detrimental to developing nations, who are still generally shipper- and carrier-oriented,” Raja Malik said in his talk on “Efficient Carriage of Goods: The Regulatory Aspects” at the conference. His presentation was read by Ahmad. Malaysia adopted the Hague Rules in its legislation in 1950 as F.M Ordinance No 13 1950. On November 15 1994, the law was revised as Act 527 — Carriage of Goods by Sea Act.Raja Malik said the carriage rules need to be up-to-date, equitable and efficient. The new law must also be in conformity with other international trea- ties and compatible with existing arrangement in countries that are major trading partners of Malaysia. He said it is important for Malaysia to make the right choice because the country is a major participant in ocean-going trade. “Whatever the choice, Malay- sia will continue to be affected by the other regimes so long as such regimes are applied by other countries in their trade with Malaysia,” he said. Raja Malik said Malaysia, the world’s 16th largest trading nation, has 90 per cent of its exports and imports handled by sea. While Malaysian ship registry records shows that there are 3,467 vessels registered with a total 7.13 million deadweight tonnes, only 1,194 ships are actually trading vessels. This means over 70 per cent of Malaysian cargo is carried by foreign flagged vessels, he said. “Due to the dependence on foreign vessels for Malaysian cargo, the efficient and safe carriage of goods by sea rests on wide acceptance and implementation of applicable international conventions and emplaced the need to apply national legislation with trading nations that use foreign flag ships,” he said. Raja Malik said the commercial point of view dictates that Malaysia’s main concern ought to be for the owner of containerised and other general cargo. Far from facilitating the movement of container traffic, he said the Hague Rules does not reach the problems associated with portside responsibilities, transhipment and the allocation of liability for concealed damage. “Nor do they provide a measure for compensation that is in any way consistent from country to country or with current cargo values, however the contents of the container are enumerated,” he added.

From http://www.emedia.com.my/ 01/23/2003

Govt Ready to Enact Privacy and Data Protection Law

The government is prepared to enact a privacy and data protection law to address the growing concern among Internet users about invasion of their privacy via the Web, Second Finance Minister Datuk Jamaludin Jarjis said. He said the government was drafting a bill for deliberation by parliament in the wake of concerns raised by consumers and in the interest of building confidence in the electronic market place. “Any privacy and data protection law enacted cannot be perfect but we have several models that we can look at and improve upon. We need to provide some flexibility for adjustments within online services in line with changes in technology,” Jamaludin said. His remarks were contained in a speech read out on his behalf by Deputy Finance Minister Datuk Chan Kong Choy at the conclusion of a seminar on E-Commerce & the Law on Privacy and the launch of a book titled Privacy & Data Protection at Universiti Tenaga Nasional in Kajang yesterday. Jamaluddin said the government, in consultation with the public and private sectors, had come up with a comprehensive personal data protection law. The legislation would provide the mechanism for collecting, processing and using data held by the public and private sectors. “It provides the individual a remedy in case of misuse of data. It seeks to protect the individual from unwanted or harmful use of their data. As such, the data privacy regime in Malaysia does not seek to cut off the flow of data but merely to see that they are collected and used in a responsible and accountable manner,” he added. Jamaluddin said that although the Internet provided conveniences from e-mail to online shopping and access to share market quotes, the potential abuses and invasion of privacy via the Internet were innumerable. “What is less understood is that the Internet also collects a great deal of information about its users. As to who uses this information and how it is used forms the basis of many Internet privacy concerns,” he said. Jamaluddin also noted that different countries had adopted different legal methods and instruments to combat the invasion of privacy issue, with the European Union using the regulatory approach and the US adopting the self-regulatory one.

From http://biz.thestar.com.my/ 01/24/2003

PHILIPPINES: SEC Vows to Come Up with SPV Regulations by Jan. 30

The Securities and Exchange Commission (SEC) is set to come up with the rules and regulations for the Special Purpose Vehicle (SPV) Act on or before January 30 this year. The SPV bill, according to SEC Chair Lilia R. Bautista, will be signed into law on January 10. The bill seeks to address and provide a timebound solution to the problem of non-performing loans (NPLs) and real estate asset problems of the financial sector. Bangko Sentral ng Pilipinas Governor Refael Buenaventura said the banks can immediately dispose P200 billion worth of non-performing loans once the SPV becomes operational. Apart from helping banks unload non-performing assets worth as much as R600 billion, the SPV bill also create a framework that would encourage the private sector investment in NPLs and assets of Philippine banks. “We are supposed to come up with the rules on SPV at the latest on January 30. The technical team will meet on January 8 to consolidate the IRR and the commission en banc will meet on January 6 to discuss the proposed rules,” Bautista said. Among the government agencies tasked with drafting the rules on the SPV Act include the SEC, Bangko Sentral ng Pilipinas, the Department of Finance, and the Bureau of Internal Revenue. The SEC would be the implementing agency of the SPV bill. Congress approved last December 17 the proposed SPV Act, which can be utilized by the government in solving the country’s budget deficit problem and improve the Philippines’ credit rating. The Senate adopted the bicameral conference committee report on the SPV bill hours after the House of Representatives passed it. Under the proposed bill, SPVs will be incorporated as a stock corporation and has the power to acquire non-performing assets (NPAs) of local banks at a discount. SPV’s also have the authority to manage or dispose of the NPA’s it acquired from financial institutions. In addition, SPVs’ minimum authorized capital stock is at P500 million, with minimum paid-up capital at P31.25 million. Another important feature of the SPV bill is the tax incetives to be provided to banks which would transfer NPAs to SPV’s. Banks would also be given two years to enjoy tax privileges as they transfer their NPAs to SPVs. SPVs, meanwhile, will have the same privileges for five years. Borrowers transferring NPAs to financial institutions will enjoy tax exemption for two years, while transactions between borrowers and SPVs will be exempt from taxes for five years. Also under the bill, the sale of banks’ distressed assets will be exempt from documentary stamp tax (DST), capital gains tax, value-added tax (VAT), and creditable withholding tax.

From http://www.mb.com.ph/ 01/01/2003

Centralized Housing Plan Proposed

Senate President Franklin Drilon pushed yesterday for amendments to the housing bill that would centralize all government housing programs and resources under a housing department, to make the office stronger and more effective. He also proposed a "one-stop-shop" housing agency that would help homeless Filipinos realize their dreams of having decent abode sans having to endure paperwork and red tape in obtaining housing loans. In his proposed amendments to Senate Bill 2133, on the Department of Housing and Urban Development, Drilon recommended the strengthening of powers of the housing secretary, by giving him full control and supervision over all agencies and instrumentality under him. Existing housing agencies would be converted into line agencies unde the department. Among them are the National Housing Authority (NHA), the National Home Mortgage Finance Corp. (NHMFC), the Home Insurance Guaranty Corp. (HIGC), the Housing and Land Use Regulatory Board (HLURB), and the Presidential Committee on Mass Housing. To be attached to the department is the Home Development Mutual Fund or the Pag-IBIG Fund. "There is a need to centralize the housing program of the government. By converting these housing agencies into line agencies of the Department processing of application for housing will be faster and more accessible as interested parties do not have to go to one agency after another," Drilon said. Should his amendment pass, the Senate president said the Department of Housing and Urban Development will formulate a single regulatory system that would govern all activities relative to housing in urban and rural areas, and urban development. The department, pursuant to Drilon's amendment, would be established as the primary policy planning, programming, coordinating, implementin, regulating administrative agency that would promote, develop ad regulate dependable networks of housing, urban planning and resettlement programs and projects. (by Gabriel S. Mabutas)

From http://www.mb.com.ph/ 01/03/2003

Arroyo Launches P9-b Anti-Poverty Program in Agusan Del Norte Rites

JABONGA, Agusan del Norte – President Gloria Macapagal Arroyo stood firm on her commitment to fight poverty and terrorism as she launched yesterday a nationwide P9.3-billion poverty alleviation program through the Kapit Bisig Laban sa Kahirapan (Kalahi)-Comprehensive Integrated Delivery of Social Services (CIDSS) in this lake town of Agusan del Norte province in the Caraga region. “Atong ipadayon ug dili kita mohunong sa pakiggubat sa kapubrihon ug terorismo” (We will continue our war against poverty and terrorism), the President said. She said this antipoverty program will alleviate the suffering of the people in the countryside. “Labanan natin itong kahirapan at kailangan nating magtulong-tulong at kapit bisig (Let’s fight poverty and we should help each other),” the President told Agusanons and Surigaonons as she met the top Caraga Region (Region XIII) officials yesterday morning here. The Chief Executive reiterated she will not run in the 2004 election, adding her Kalahi program will be her legacy to her successor. “I urged you to make a wise use of the project for the improvement of our people,” she said. Mrs. Arroyo said that her commitment of peace and development for Mindanao is her priority program to fulfill in making Mindanao as the Land of Promise. She said that peace, development and social justice will achieve Mindanao’s vision. “My commitment is to fight poverty and terrorism,” she stressed. The President also announced the release of P4.3-million for the 15 barangays of Jabonga town, being the pilot project of Kalahi program in the Caraga Region. The President aborted her Tuesday swing in the Caraga Region due to bad weather condition and instead continued her schedule yesterday morning here. The President first swing was in Central Mindanao, where she met the Mindanao top AFP and PNP officials there. Mrs. Arroyo, who was a member of the Senate before she run for and won the vice presidency, did not make any hard political statements and instead asked Caraga officials to help achieve her poverty alleviation program in her remaining 18 months in the presidency. The President who was accompanied by Social Welfare Development Secretary Corazon Soliman, Agriculture Secretary Luis Lorenzo, Defense Secretary Angelo Reyes and other Cabinet officials, launched her Klahi-CIDSS in the 15 barangays of Jabonga town. In her brief message, the President announced several livelihood and income generating projects and multi-million infrastructure programs through Kalahi-CIDSS. At least 3 towns had been pinpointed as Kalahi-CIDSS pilot areas in the Caraga region. The President was welcomed by Caraga officials led by Presidential Assistant for Northeastern Mindanao Joboy Aquino, Agusan del Norte Gov. Ma. Angelica Rosedell Amante, Rep. Leovigildo Banaag, Jabonga Mayor Glecerio Monton, Jr. and ranking military officers led by Northern Mindanao Police regional office 13 director Chief Supt. Alberto R. Olario and Fourth Infantry (Diamond) division chief Maj. Gen. Alfonso P. Dagudag and other local chief executives and NGOs. After the Agusan visit, the President immediately flew to Placer, Surigao del Norte and inaugurated several multi-million infrastructure projects such as bridges and ports. Successor JABONGA, Agusan del Norte — President Gloria Macapagal Arroyo yesterday expressed hope that her successor in 2004 will continue to lead the Filipino people to win the war against poverty within the decade. In a message at the launching of the Kabalikat Laban sa Kahirapan (Kalahi) program here, the President said she had obtained the necessary funds to pave the way for the implementation of an ambitious anti-poverty program nationwide. She said the Kalahi program is one of the main aims for her visit to Washington, DC, in December, 2001, when she succeeded in getting the approval of the World Bank to allot P5.1 billion to help finance the P9.3 billion social services program in the next five years. To the applause of her mainly Cebuano-speaking audience, the Chief Executive said the fund aid that will be given to Jabonga will be as comprehensive as possible. Speaking in Cabueno and English, she noted that the people of Jabonga will soon see that day when “land will be distributed where possible; more education, public works and health and sanitation services will be made available, and jobs will be encouraged, as we encourage the growth of micro small and medium enterprises.” She said Jabonga, a rice-producing town 59 kilometers from Butuan City, stands to get P3.5 million a year for three years for its Kalahi project. Immediately after Jabonga, the Kalahi program will be launched in 10 others towns in 10 others regions. This year alone, the program is expected to cover 70 towns with 1,670 barangays. Next year, it will spread to another 66 towns. “After that, my successor will take over, but I have already obtained the funding from the World Bank for its continuity,” ensuring that the program will “last long beyond my term as president,” she said. “This will be a legacy that I will bequeath to my successor in the hope that he or she will further lead the victory against poverty within the decade,” she said. (by Mike U. Crismundo)

From http://www.mb.com.ph/ 01/22/2003

Napocor Set to Rebid All-risk Insurance Policy

State-owned National Power Corporation (NPC) will be re-bidding its industrial all-risk (IAR) policy next week after declaring a failure of bidding in the first auction it has undertaken. We will have a re-bidding next week. There was only one bidder in the first bidding, but it was also disqualified because it was not able to satisfy requirements under the terms of reference,? said newly-installed NPC president Rogelio Murga. It was pointed out that the worth of NPC assets to be insured would more or less be of the same magnitude to that of last year, which is $6.5 billion. The bidding on the power firm’s re-insurance policy is being undertaken by the joint committee comprising of representatives from NPC, Department of Finance and Government Service and Insurance System. Last year’s reinsurance policy of NPC was cornered by Heath Lambert, one of the world’s leading insurance and reinsurance brokers and the largest independent broker in the United Kingdom Under such policy, the worth of NPC’s insurable assets have been sub-divided into four components, but the bulk of the insurance cover is on the non-marine IAR policy. The other components are: a) non-marine submarine cable; b) non-marine sabotage and terrorism; and c) marine hull policies. President Arroyo has earlier ordered the creation of a special committee to tackle bidding of the power firm’s re-insurance policy; to effect greater transparency in the process. Republic Act 656, as amended by Presidential Decree 245, requires government-owned and controlled corporations to insure their properties against any insurable risk with the General Insurance Fund of the GSIS, and pay the premiums thereon which shall not exceed the premiums charged by the private insurance companies. The insurance broker shall enter into a valid and comprehensive service contract with the GSIS and NPC to highlight the broker’s responsibility to respond to the needs of the power firm. NPC and GSIS are also mandated by Memorandum Order No. 30 earlier issued by Malaca?ang, to share and have access to any and all records, documents and information pertinent to the placement of insurance, reinsurance and retrocession of the power firm insurance program. These would include property appraisal reports, valuation studies, risk survey reports, claims documents, adjusters reports, reinsurance and retrocession placement or confirmation slips, and billing and accounting records. (by Myrna M. Velasco)

From http://www.mb.com.ph/ 01/23/2003

Draft Long-term Plan for Industry, Gov’t Told

Government should draft a long-term plan for industrial development apart from individual product development plans. In a forum held the other day by the Fair Trade Alliance, businessmen and economists from the private sector urged government to pursue an industrial policy similar to those undertaken by the country’s newly industrialized Asian neighbors. “Malaysia and China have their 20-year plans. We should also have a national blueprint, and individual plans for specific products,” Jose Concepcion told participants of a roundtable discussion on nationalist industrialization. The businessman said long-term planning on the part of the two countries was responsible for the competitiveness of their respective industrial sectors. In addition, the case of the South Korean steel industry is instructive, said Action for Economic Reforms economist Cristina Morales. While South Korea initially didn’t have any comparative advantage in steel production, she said Seoul “went to great lengths to nurture” this industry. Morales cited the capabilities approach in economics, which supposedly allowed for protection to give an industry and its workers enough time to adjust to unbridled market competition. In the case of Korea, a protected steel sector helped it to give rise to other industries downstream such as an automobile assembly industry. In contrast, the Philippine electronics industry, while accounting for a sizeable share of the country’s foreign exchange earnings, faces the threat of competition from China, Morales said. Given what she called the “carrot treatment” afforded foreign investors, the latter had no incentive to go beyond mere assembly-cum-testing, and pursue technological deepening. Based merely on the Philippines’ relatively cheap labor advantage, the country’s electronics sector “failed to take root,” and so faces the prospect of losing out to China, which has emerged as a cheaper labor market, Morales said. In the same forum, Bangkok-based Focus on the Global South economist Joy Chavez-Malaluan called for a “strategic economic plan” similar to what Japan and South Korea undertook after the Second World War. While the Philippines took a crack at industrializing through the import-substitution approach, she said the country’s experiment failed to take root since it didn’t adopt technological deepening and contented itself with keeping labor in marginal jobs. Worse, the Philippines’ past industrialization strategy ignored the political influence a small number of businessmen wielded over state-planning, thus leading to a highly protected yet inefficient small industrial sector, Malaluan said. “Simple protectionism, like liberalism is insufficient. We should have an industrial design that develops internal markets even as we push for exports,” the economist said. Criteria Malaluan said there is still scope for an industrial policy that need not run counter to consumer interests. Indeed, past protectionist policies had been criticized because of their tendency to support inefficient firms producing uncompetitive products at the expense of consumers. “If we’re going to protect industries, then we should have a criteria,” she said. An important criteria she raised is to ensure “protected” sectors have strong backward and forward linkages in other economic sectors. Barring such linkages, Malaluan proposed allowing protection for sectors, in cases where lack of protection would lead to wide-ranging social inequities. An example of the latter is the rice and corn sectors, both of which account for the bulk of rural households. “The fact that 70 percent of households depend on them is (enough to merit protection), since protecting them would have social distributive effects,” the economist said. Both Malaluan and Morales urged government to undertake an industrial policy of protection based on a limited timetable and on clear performance measures. “Protection should be selective and targeted because not all industries will become competitive,” Morales said. In addition, the strategy should be transparent to prevent corruption and rent-seeking, or the phenomenon of powerful groups extracting monopoly advantages at the expense of other sectors of society, the economist said. (by Arnold S. Tenorio)

From http://www.manilatimes.net/ 01/24/2003

SINGAPORE: Investment-Linked Policies: 9% Returns?

Growing frustration by investors over promotional material that may paint an unrealistically rosy picture of returns on insurance policies linked to investment funds has sparked an official response. The Monetary Authority of Singapore (MAS) said yesterday it will conduct a review of the rates of return which are used as illustrations for these investment-linked policies (ILPs). Policyholders and some insurance experts say that the industry's standard rates of 5 and 9 per cent, used in written illustrations given to prospective investors, are starting to border on misrepresentation, considering today's sluggish market. 'Why use the two rates for illustration if they are not realistic in today's market? It will only lead to misunderstanding,' said one policyholder. ILPs offer life insurance coverage along with an investment in a fund which may include bonds and equities. Rates of return vary but some ILPs have been struggling to make money in recent times. The MAS' announcement of a review came in response to a query from The Straits Times detailing concerns raised by industry observers and policyholders. These critics said the illustrations did not offer a reasonable representation of projected returns, or even actual returns, given the lacklustre performance over recent years. An insurance expert who declined to be named said: 'The products are sold to the consumer based on the illustration. Therefore the current illustration is creating unreasonable expectations on the part of the customer.' If insurers do not have a reasonable basis to believe that they will be able to deliver based on what they are illustrating, why do they illustrate in such a way? 'This is particularly so when the two rates are used in all ILP illustrations, regardless of how long the policyholder is planning to invest. In its statement to The Straits Times, MAS said it would work with the Life Insurance Association (LIA) to review existing standards for illustrated rates of returns and to further enhance disclosure for ILPs. The LIA said yesterday that it set the rates 10 years ago when ILPs were introduced. These rates were used industry-wide 'to illustrate the volatility of the underlying funds'. Industry experts believe that the rates, particularly 9 per cent, may be achievable only in the long run and usually for specific funds which are equities-based. The public should be told that the two rates do not represent the lower and upper limits of the plan, they say. First Principal Financial group manager and principal partner Mervyn Goh said that 'given a long investment horizon of 20 years or more, the rates should be realistic, as the effect of smoothening out should come in'. Not every policyholder buys an ILP with a 20-year horizon but the same rates are used regardless. Dollar DEX investments chief executive Chris Firth said that 'conservative' ILPs which invest in bonds and balanced equity funds will never achieve 9 per cent returns even in the long run and such an illustration could be seen as 'misleading'. Still, the MAS emphasised that the current rates 'are for illustrative purposes and not meant to be a prediction of returns that policyholders will get'. Life insurers, it added, are required to state clearly that the actual benefits from ILPs 'will be dependent on the actual performance of the underlying assets, which can be higher or lower than the illustrated returns'. Mr Firth suggests that the illustrative rates should be customised to the investment profile of each ILP.An alternative would be to use three different investment rates of 8 per cent, 6 per cent and 4 per cent for equity, balanced and bond funds, respectively. The rates of return - 5 per cent and 9 per cent - have been used by insurers since investment-linked products (ILPs) were introduced 10 years ago. Are they still valid in today's sluggish market? 'Life insurance companies are required to disclose clearly that the actual benefits payable under ILP will be dependent on the actual performance of the underlying assets, which can be higher or lower than the illustrated returns. These two projected rates of return are not expected returns of the ILP. The actualinvestment returns may be higher or lower depending on the actual performance of the underlying funds. The figures are unrealistic and border on misrepresentation. 'The products are sold to the consumer based on the illustration...if insurers do not have a reasonable basis to believe that they will be able to deliver based on what they are illustrating, why do they illustrate in such a way?'- An insurance expert'Why use the two rates for illustration if they are not realistic in today's market? It will only lead to misunderstanding from policyholders.'

From http://straitstimes.asia1.com.sg/ 01/14/2003

Law Against Financing Terrorism Kicks In on Jan 29

A new law aimed at depriving terrorists of financial sustenance will take effect here on Jan 29. Once the Terrorism (Suppression of Financing) Act comes into effect, Singapore will join 63 other states that have signed and ratified or acceded to the International Convention for the Suppression of the Financing of Terrorism. Among the states that have already done so are Australia, the Ukraine, Vietnam and Cuba, said a statement from the Ministry of Home Affairs on Wednesday. More than 60 other states have also signed the convention, but have yet to ratify or accede to it. Under the act, which Parliament passed on July 8 last year, anyone who directly or indirectly provides, collects, possesses or deals with property for the purpose of terrorism can be fined up to $100,000 and jailed for up to 10 years. Such property, which can be anything from money and bank cheques to shares and bonds, can also be seized. Anyone who withholds information that could prevent terrorist-financed offences from taking place, or that could lead to the arrest of people involved in such activities, can be fined up to $50,000 and jailed for up to five years.

From http://straitstimes.asia1.com.sg/ 01/17/2003

THAILAND: Housing Project for Poor

The Social Development and Human Security Ministry will propose the housing project for the poor to the cabinet for approval tomorrow. Over 4,000 units can be ordered by Valentine's Day. Minister Anurak Jureemat yesterday said the first phase of the project was estimated at 4.62 billion baht and would target people who earned 10,000-15,000 baht a month and could not afford residential units developed by the private sector. The people fall in two categories: slum dwellers who encroach on public or private land, and those who have not owned a home and are living in rented units. Mr. Anurak said the housing project for the poor would focus on friendly environment for living as every project site would include activity grounds, sports fields and nurseries. Over 4,000 units will be opened for order on Feb 14.

From www.bangkokpost.com 01/13/2003

Economic Laws to Be Amended

Prime Minister Thaksin Shinawatra has agreed in principle to amend some of the economic laws issued by the Chuan administration to make it clear whether public utilities should remain wholly state-owned or be partially privatised. Weng Tochirakarn, of the Confederation for Democracy, said the prime minister signed an agreement on Friday to alter some of the 11 economic laws. Yesterday's meeting on the amendments resolved that the state was obligated to provide basic public utilities to the people. The state enterprises would either become wholly state-owned, be partially privatised, or be wholly privatised. The corporatisation law would also have to be reviewed first to avoid any legal complications. The government was also duty-bound to take on management challenges to turn loss-ridden enterprises around. But profitability must also go hand in hand with people's rights to have access to quality public utilities. Sutham Saengprathum, prime minister's adviser and member of the economic law amendment panel, said the panel meeting thought the government should be fully in charge of running basic utilities such as electricity, waterworks, the telephone organisation and public transportation. Details of how they should function in the future would be worked out by the prime minister's secretariat office. Mr. Sutham admitted state enterprises were prone to exploitation by politicians, which explains why there had been administrative failures in the past. (by Ampa Santimethaneedol)

From www.bangkokpost.com 01/14/2003

New Envoys Told to Promote Government's Dual Track Policy

New ambassadors sent abroad must have a better knowledge of Thai society and government policy than diplomats in the past. Foreign Minister Surakiart Sathirathai said the prime minister made this clear in a 40-minute lecture he gave to 21 new ambassadors. They were told they had to understand grassroots people and civil society, as well as government policies, so they could better communicate with the international community. Diplomats should study the government's emphasis on international economic and domestic policies, dubbed as dual track, and promote efforts for free trade areas, establishment of the Asia Bond Market, and Asia Cooperation Dialogue (ACD), Mr. Surakiart said. Thailand would no longer seek foreign aid but strategic partnerships, and there was a need to strengthen the Association of Southeast Asian Nations (Asean) and the Asia Pacific Economic Cooperation (Apec) forum. Mr. Surakiart said he would present a proposal for the revamping of Thai foreign missions to Prime Minister Thaksin Shinawatra on Feb 3. The plan had taken a year to prepare, the minister said. If approved, staffing at some overseas posts might be reduced. Other places might need more people to better address the government's objectives is those countries. The prime minister would later meet with heads of other government agencies and decide if they had to readjust their job description abroad or not, Mr. Surakiart said. (by Achara Ashayagachat)

From www.bangkokpost.com 01/15/2003

New MOF Board Up for Approval Jan 21

The Agriculture Ministry is preparing a new line-up for the Marketing Organisation for Farmers' executive board, which resigned en masse on Friday. Agriculture Minister Sora-at Klinprathum said the cabinet would be asked to approve the new board next Tuesday. The seven-member former board, chaired by former agriculture deputy permanent secretary Suthiporn Jeeraphan, were angry about a perceived lack of cooperation from officials, especially in the fight against corruption in the MOF. The MOF has been under constant spotlight recently, following reports alleging malfeasance in the rice and lamyai crop mortgage schemes and provision of compost to flood-hit farmers. ``The ministry will appoint experts in several fields, such as marketing and finance, to the board because it was a lack of business skill among the administrators that led to the organisation's poor performance,'' the agriculture minister said.

From www.bangkokpost.com 01/15/2003

Thailand Plans to Increase Its Aid Budget

Thailand's overseas aid budget should increase to reflect its increasing role in international affairs, a senior official at the Department of Technical and Economic Cooperation said. Thailand is trying to lift its image in developing countries and plans to increase its aid budget next fiscal year. Pradap Pibulsonggram, director-general for the department, said the launch of the Asian Cooperation Dialogue, and the Asia-Pacific Economic Cooperation forum in Thailand this year, would give the country a bigger say in the region. ``We need a bigger overseas aid budget,'' said Mr. Pradap. After the 1997 economic crisis overseas aid was cut from a peak of 400 million baht a year. In the year to September it is 116 million baht. Most goes to immediate neighbours Burma, Cambodia, Laos and also Vietnam. Mr. Pradap said the department was looking for partners such as third countries, international organisations and even the private sector to boost aid. East Timor, Afghanistan and Sri Lanka would get help on agriculture and resettlement in the aftermath of fighting there, said Mr. Pradap. (by Bhanravee Tansubhapol Saritdet Marukatat)

From www.bangkokpost.com 01/18/2003

VIET NAM: Conference Reveals Government Plan for Massive IT Investments

The Government will invest nearly US$100 million in the software industry over the next three years, according to presenters at a conference on Viet Nam’s software development. The two-day conference, which wrapped up in Ha Noi on Wednesday, focused on trends in the software industry in Viet Nam and abroad. Experts at the conference also discussed related matters such as copyright and intellectual property rights, and the experiences of regional IT hubs, such as India and China. At the conference, representatives of US telecom giant Motorola shared their experience in testing software quality to meet the standards of international software organisations. The company said that besides increasing IT projects with Viet Nam, it will also grant a package scholarship worth $200,000 to help train Vietnamese IT experts. Software and services account for only 25 per cent of Viet Nam’s information technology market, which deals mainly with personal computers and local area network installations in offices. Viet Nam’s software industry aims to net a gross total revenue of $500 million by 2005, $200 million of which will come from exports, and to provide jobs for 25,000 to 30,000 IT workers. The conference was jointly organised by the Ministry of Post and Telematics and Motorola.

From http://vietnamnews.vnagency.com.vn/ 01/09/2003

Finance Ministry Crafts Yardstick for State Enterprise Performance

In an effort to improve the running of State-owned enterprises, the Government has drafted for them a carrot-and-stick policy based on performance criteria. According to Deputy Finance Minister Tran Van Ta, seven such criteria have been laid down, upon which all State-owned enterprises (SOEs) will be assessed; while rewards for good performance would include pumping in more capital and executive pay raises; while failures could mean dismissals, equitisation or even bankruptcy. The Ministry of Finance, whose brainchild the scheme is, has envisaged parameters like turnover, profit, overdue debts and debt repayment ability, and payment into the State budget. Self-assessment by SOEs would be followed by audit by State agencies for final rating. The performance parameters would serve to provide warning signals for SOEs, Ta said. "The truth is some enterprises cannot monitor their own health. They may be so busy getting orders that debts may accumulate and insolvency may occur without their knowing," he said. "So, this is to help cases where, for instance, bankruptcy could be looming though an enterprise is thought to be performing well." The regulation will be applicable to all SOEs and State-owned banks, including parents-subsidiaries, one-member limited liability firms, and joint stock companies with a controlling stake owned by the State. Over 5,000 SOEs will come into the net. The new criteria would segregate them into A, B, and C grades, based on ratings for each parameter. An SOE must have at least three As, including one for profits, and no Cs to get an overall A for the year. For those achieving an A for three consecutive years, the State will consider providing more funds to finance projects, and pay raises for managers. At those firms getting three Cs in a row, managers could get the boot and the State could restructure via equitisation, transfer, sale, merger, liquidation or bankruptcy. The new criteria-based assessment is set to usher in uniform evaluation standards, and give the Government a clearer idea of the efficiency of its capital investments. Until now, SOEs were assessed by a multitude of agencies – the ministry, State Inspectorate, procurators – having different standards, without each acknowledging the others’ evaluations. The new scheme will also ultimately facilitate the Government’s control of SOEs, said Ta. "The State will not intervene in businesses’ daily activities. It will only examine independent audit results to judge an SOE," he said. However, the targets of the exercise were none-too-happy: some SOE chiefs complained that seven criteria were too many. Le Quoc An, chairman of the Viet Nam Textile and Garment Corporation, thought there should be only two, profits and contribution to the State budget, and that even they should be modified. "It is tough for even a good performer to get an A in profits, as the draft requires the profit to capital ratio to be higher than the previous year," he said. "But in our sector, the ratio is already as high as 20 per cent for 2002 making it virtually impossible for us to do any better next year." An proposed that the profits ratio be linked to bank interest rates rather than previous performances. According to other corporate managers, it is also hard for those with already high turnovers to achieve 5, 7 or 10 per cent growth (depending on sector) to get an A for turnover. The budget contribution criteria are also difficult for exporters, as taxes are often imposed on imports and domestic sales, they said. "The garment sector is focusing on boosting exports, therefore we may cut down on domestic sales. Then, of course we cannot pay more taxes than last year," An pointed out. "So, I think meeting all our tax obligations during the year should be made sufficient for us to get an A for budget contribution," he suggested. Vu Khang, chairman of Viet Nam Forestry Corporation, said trade distinctions should be considered when applying the criteria, rather than uniformly applying them. "It may take us seven years to harvest forest trees. During that period, how can we get higher revenues and profits than the previous year?" The ministry is taking a final look at the draft before submission soon to the Government for approval. Two of the criteria may be dropped, Ta revealed. The new policy is likely to come into effect in the first quarter this year, he said.

From http://vietnamnews.vnagency.com.vn/ 01/09/2003

Tax Polices in 2003: Six Amendments Effected

According to the Ministry of Finance, taxation in 2002 has recorded encouraging achievements to meet increasing spending requirement of the state. Rate of mobilization over GDP reached the planned target. However, it has unveiled some problems to be corrected as it was bias to more protection for domestic production; not much to accelerate technology renewal increasing competitiveness of productions, loopholes appearance. To overcome the above problems, in 2003, the government will have amendment and supplement of tax policies under direction of cutting tax as per Vietnam’s commitments with international community; shrinking tax rates; enlarging scope of tax payers; adopting same tax obligation between the domestic and FDI enterprises; reducing income tax rates allowing enterprises and individuals to have more investment for technology renewal. In 2003, following points on the current tax policies will be amended. 1) On the VAT, services and products being subject to special consuming tax will be subject to VAT; tax rate will be decreased from 4 to 3; adopting measure of tax reduction... 2) On the special consuming tax, some more commodities will be subject to the special consuming tax; adjusting tax rate in line with VAT adopted. 3) Adopting same rate of business income tax for the domestic and FDI enterprises, abolishing the additional income tax for domestic enterprises and tax imposed on the profit remittance repatriated by foreign investors. 4) On high income tax, applying same tax rate on regular and irregular incomes; tax starting point will be adjusted. 5) Cutting tax of more than 700 items of goods as per AFTA/CEPT; abolishing preferential treatment on localization rate for motorbikes, decreasing number of tax rates, applying price for taxing in principles of GATT/WTO. 6) Collecting land lease upon land allocation; tax exemption for agricultural land within approved limit, collecting tax on transfer of land use right... 7) Setting fees and commission under direct of reducing payment for the payers, creating equality between the domestic and FDI enterprises.

From http://www.bvom.com/ 01/23/2003

BANGLADESH: PM Declares 2003 as 'Good Education Year'

Declaring the year 2003 as "Good Education Year", Prime Minister Khaleda Zia yesterday called for attaining minimum standard of education in all educational institutions of the country during the year-long campaign. "Now I'll not only hope, but also demand, that all educational institutions of the country ensure minimum standards of education, although it's not possible to achieve high standards of education at some government and non-government institutions. But minimum standards have to be achieved in one year," she told a function launching the campaign. The prime minister also announced that a decision had been taken to constitute a National Education Commission to formulate a National Education Policy to modernise education system in keeping with national values and thoughts. Addressing the prize-giving ceremony of National Education Week 2003 at the Bangladesh-China Friendship Conference Centre, Khaleda said her government innovated and introduced many programs for expansion of scope and incentives for education. At the function, the prime minister gave four computers to the headmaster and the principal of one school and one madrassah, initiating the distribution of 25,000 computers among educational institutions, one of her government's priority programs. She also formally opened this year's textbook distribution giving away books of primary and secondary schools and madrassahs to some students. This is for the first time that a government is providing books free of cost to the students of Ebtedayi madrassahs. Khaleda also gave away prizes to those students of schools, colleges, madrassahs and universities who secured first position in national competitions in different fields, including Kerat, Hamd, essay writing, poetry recitation, extempore speech, songs, dance, acting and debate. Education Minister Dr Osman Farruq, State Minister for Education Ehsanul Huq Milon and Deputy Minister for Education Abdus Salam Pintu also spoke on the function. Addressing the function, Prime Minister Khaleda Zia said another objective of announcing the year 2003 as Good Education Year is to make every teacher attentive to developing the human and moral values in each student. Listing her government's ongoing pragmatic programs and plans for promotion of quality schooling, Khaleda told the function that "Shaheed Ziaur Rahman ICT Scholarship" is being introduced from the secondary level to higher studies to provide assistance to poor and meritorious students in Information Communication Technology education. She also mentioned an initiative already taken to institute Prime Minister's Scholarship for poor meritorious girl students in ICT education at the university level. Informing her audience from the academic arena that the public examination system is being reformed, she said a project had been taken to build multipurpose halls for examinees each with a seating capacity of 2,000 in every upazila in phases. Citing the sorry state of some educational institutions, the prime minister said the existing faults and inconsistencies in the education system would have to be removed. In this respect, she said the country's education system is not well planned while there are discrepancies in the standard of education. Referring to the educated unemployed people, Khaleda said the country would have to proceed towards introducing a planned profession and vocation-oriented education system to meet the demand of time. Mentioning the theme of the Education Week "Education for Self-reliance", the PM said the dictum would come true if the education system can cope with the challenges of the 21st century.

From http://www.dailystarnews.com/ 01/03/2003

Bill on ICT to Be Placed in JS

Bangladesh stepped into the year 2003 with tangible achievements in the field of information and communication technology (ICT). The cabinet has endorsed the ICT policy which will be placed before the Jatiya Sangsad as a new bill. The new policy will pave ways for digital signature and electronic transactions. The Bangladesh Computer Council (BCC) has established ICT incubator where 155 companies are showcasing their products. Bangladesh has also decided to open ICT kiosk in Silicon Valley for marketing local products. The country has established ties with an international consortium for linking with SEA-ME-WE-4 submarine undersea cable network which will offer optimum bandwidth for the subscribers. The number of Internet users across the country has crossed the five lakh mark. All 64 district headquarters are providing Internet connections for common people. Bangladesh Telecommunication Regulatory Commission (BTRC) is actively considering the issue of legalising VOIP system or Internet telephony in the country. Official sources said efforts are underway for developing human resources in the ICT sector. The government has recently decided to connect some select schools with information super highway via Internet

From http://www.dailystarnews.com/ 01/05/2003

INDIA: Vajpayee Gets Control of N-Command System

New Delhi, India (PNS) - India announced a nuclear command system on Saturday, keeping civilian control on using its ominous arsenal but appeared to deliberately kept vague its nofirst use stance, saying it could retaliate for a major attack, including a biological or a chemical weapons assault, on Indian forces at home and significantly, elsewhere. This was said in an official statement issued in New Delhi after a two-hour cabinet committee on security (CCS) meeting presided over by Indian Prime Minister Atal Bihari Vajpayee. It said the CCS met under the leadership of Prime Minister Atal Behari Vajpayee "to review the progress in operationalizing of Indian's nuclear doctrine." On the India's nuclear doctrine, the statement summarized it a. 1.Building and maintaining a credible minimun deterrent; 2. A posture of "No First Use": nuclear weapons will only be used in retaliation against a nuclear attack on Indian territory or on Indian forces anywhere; 3. Nuclear retaliation to a first strike will be massive and designed to inflict unacceptable damage; 4. Non-use of nuclear weapons against non-nuclear weapon states; 5. However, in the event of a major attack against India, or Indian forces anywhere, by biological or chemical weapons, India will retain the option of retaliating with nuclear weapons; 6. A continuance of strict controls on export of nuclear and missile related materials and technologies, participation in the Fissile Material Cutoff Treaty negotiations, and continued observance of the moratorium on nuclear test; and 7. Continued commitment to the goal of a nuclear weapons-free world, through global, verifiable and non-discriminatory nuclear disarmament.

From http://www.paknews.com/ 01/05/2003

Broadcasting Council Bill to Be tabled in Parliament

MUMBAI: The Broadcasting Council Bill, which envisages setting up of an independent regulatory authority to monitor obscenity and vulgarity projected through broadcasting medium, would be tabled in Parliament during the coming budget session, Union Minister for Information and Broadcasting Sushma Swaraj said on Tuesday. "The detailed provisions of the bill are yet to be finalised though the general concept is ready", Swaraj said while addressing the Jankidevi Bajaj Puraskar function here. The need for the Broadcasting Council Bill arose as the setting up of a committee for the much-talked about convergence bill had been delayed for past two years, she said. "When I found that the setting up of the commission for drafting of the convergence bill was taking too long, I approached the Prime Minister and pressed for the Broadcasting Council Bill to tackle the numerous complaints relating to obscenity in the media," the minister said. Recounting the criticism when she first took up the issue of obscenity in the media and demanded closing down FD channel and scrapping two vulgar advertisments, Swaraj said "at that time I was heaped with the sobriquet Cultural Police Woman. However, today these very detractors have come forward urging me for an urgent measures to nip vulgarity in media." Welcoming the change in attitude, she said her detractors had realised the adverse consequences of such entertainment channels during the last two years. "My intention in scrapping such channels had been based on a concern for deteriorating social and moral values following an unrestricted exposure to such media," Swaraj added.

From http://timesofindia.indiatimes.com/ 01/07/2003

2003 Should Be 'Year of Action': Kalam

President APJ Abdul Kalam on Sunday said 2003 should be the "year of action" for achieving the goal of developed India by 2020 and that this required the participation of all concerned. Speaking on "Transforming India into a developed country by 2020", on the concluding day of the two-day Governors Conference at Rashtrapati Bhavan, he said for India to be a developed country by 2020, there was need for involvement of all concerned specially the Governors. He outlined his talk with a computerized show explaining various aspects which needed to be focussed upon for the country to become a developed nation. In his address, Prime Minister Atal Bihari Vajpayee said his Government was committed to making India a developed country by 2020 and concurred with the opinion of the President that all the people should actively participate in reaching this goal. Vajpayee said the deliberations at the Conference were meaningful as it enabled the Government to know about the developmental works being carried out in states and also provided a forum for exchange of views on various issues. Among those who participated in the Conference were Vice President Bhairon Singh Shekhawat, Vajpayee, Deputy Prime Minister LK Advani, Deputy Chairman Planning Commission KC Pant and several Union ministers. The 28 Governors and three Lt Governors suggested measures to take India towards the goal of becoming a developed country by 2020 which formed the agenda for discussion. After the Conference, the Governors attended a lunch hosted by the Prime Minister.

From http://www.hindustantimes.com/ 01/12/2003

India Determined to Fight Terrorism in All Its Forms: Mahajan

Cautioning against equating Islam with terrorism, India has said it was determined to fight the menace globally in all its forms. Parliamentary Affairs Minister Pramod Mahajan, who is leading a delegation of MPs to Egypt, said Islam was a religion of peace and should never be confused with terrorism which had nothing to do with religion. However, he said several innocents in India had lost their lives to terrorism and the country would fight the menace globally. He conveyed this to chairman of the Shura Council Mustafa Kamal Helmi, who said though terrorism posed a challenge the world over, it was unfair to label it with Islam, according to sources. The delegation also had meetings with Minister of State for People's Assembly Kamal Mohammad Shazly and Dr Fathi Sou Rour, Speaker of the People's Assembly in which the Egyptian side expressed awe of the working of Indian democracy and parliamentary system, the sources said. Taking a cue from a Parliament museum it visited here, the delegation decided to put up a proposal to the Lok Sabha Speaker to set up such a museum in New Delhi displaying rare parliament manuscripts. Shazly, the official host of the delegation, specifically mentioned India's role in the Inter-Parliamentary Union (IPU) while the Speaker said he was impressed with the way elections were held in India. The Speaker also said that during his recent visit to Delhi, he saw the kind of prerogatives enjoyed by the Speaker in conducting the House and took a cue from them when he returned to Cairo. Mahajan was honoured with a Shura model as a token of appreciation. Mustafa Al Fikki, chairman of the Foreign Relations Committee of People's Assembly, said Egypt has never opposed India on local, regional and international issues. Both Shazly and Fikki will be attending celebrations of 50 years of Indian Parliament in Delhi later this month. The Egyptian leaders talked about changes in Egypt while Mahajan gave them an account of developments in India, particularly in communications and information technology, and said trade and commerce and the Non-Aligned Movement had strengthened ties between the two countries.

From http://www.hindustantimes.com/ 01/13/2003

Kalam Asks India Inc to Raise Contribution in GDP

President A P J Abdul Kalam on Tuesday asked the industry to aggressively market itself in global markets and increase its contribution in GDP to transform India into a developed country. "Industrial sector's contribution in GDP is stagnant at only 15-20 per cent during the past 50 years despite being offered several concessions," Kalam said at the golden jubilee celebrations of Indian Chamber of Commerce and Industry. "I call upon you to aggressively market yourself and integrate to become multinational companies to contribute more in GDP." Indian industry, the President said, should focus on manufacturing and using new technology because the rest of the world was moving away from the concept of MNCs, giving opportunity to Indian industry to fill that gap. Kalam said the next 20 years would be a period of technology transformation in India and industry; IT and telecom could play an important role in shaping the future of the country. "The challenge before all of us is how to change the fortune of about 300 million people living below the poverty line in the country and what should be the mechanism that we adopt to become economically strong," Kalam said. He said if the country wanted to develop and stand economically strong, GDP should double to nine per cent from 4.5 per cent. "We need to concentrate on healthcare, education, IT and infrastructure to double the GDP and transform India to a developed country by 2020," Kalam said. Removing poverty, self reliance in critical technology and transparent governance were also required to achieve this, he said. "Around 70 per cent of our people live in rural India and taking IT, tele-medication, tele-education telecommunication to them is a challenging job which could be done with the active participation of industry," the President said. "We strive to dream of not only economic strength, but cultural strength as well for all round growth," he said. To the members of ICC, he said the eastern and north-eastern region must play an important role if India has to transform itself as a whole. ICC president Aditya V Lodha said: "We are in an age where knowledge is the fundamental source of wealth, power and progress and success will come to those who have the capacity to conceptualise, the competence to implement and the competitiveness to stay ahead."If we wish to make a difference, we will have to do away with the comfort zone of marginal thinking and incremental planning," Lodha said.

from http://www.hindustantimes.com/ 01/21/2003

SRI LANKA: PM Nominated Sri Lankan of the Year

The business magazine Lanka Monthly Digest, has nominated Prime Minister Ranil Wickremesinghe as its Sri Lankan of the Year, the magazine announced last night. He will be featured on the cover of the LMD's first issue of the New Year. Previous recipients of the honour include cricketer Arjuna Ranatunga, Foreign Minister Lakshman Kadirgamar, sprinter Susanthika Jayasinghe, tycoon Lalith Kotelawala and former Chamber President Chandra Jayaratne. In its citation LMD says they decided to honour Wickremesinghe because of his commitment to peace, being "chiefly responsible for the cohabitation and placing national interest before that of the party." The Prime Minister in response has told LMD that he dedicates the award to "the People of Sri Lanka," because "the people have been supportive, the economy has improved as a result of the peace in the North and East. In the final analysis it is the people who really deserve the award."

From http://www.dailynews.lk/ 12/31/2002

Three Labour Bills Tomorrow

The proposed three labor Bills scheduled to be taken up for debate tomorrow are the most progressive labor reforms in the recent past which will not be harmful to anyone but a blessing for employees and employers, Minister of Employment and Labor Mahinda Samarasinghe told the Daily News yesterday. The Three Bills are: Industrial Disputes (Hearing and Determination of proceedings- Special Provision) Bill, Industrial Disputes (Amendment) Bill and Termination of Employment of Workmen (Special Provisions -Amendment) Bill. However, the JVP has organized a picketing at the Fort Railway Station today at 3.00pm against the three Bills. They will march to the Presidential Secretariat to hand over a petition with one million signatures of labourers in the country urging the President to stop implementing these three labor bills, JVP MP Anura Kumara Dissanayake said. Ceylon Worker's Congress MP R. Yogarajan said they are discussing with the Government to introduce amendments. "We believe that the Government will positively respond to our amendments." PA MP Dr.Sarath Amunugama said they are concerned about the new labor reforms and this subject will be taken up at today's group meeting. Responding to these views Minister Samarasinghe said a Social Security Network will be in place to protect laborers before implementing these three Bills. "Already a group of ILO experts have engaged in preparing a Social Security Network and they will report to me before January 15. Thereafter, I will seek Cabinet approval for implementation," he added. The Minister said that if Sri Lanka has to maintain its position in the international market, it has to increase the competitiveness as a nation. Already India, Pakistan and Bangladesh have introduced far-reaching labor reforms in order to attract foreign investors and to maintain their competitiveness. "Though we have delayed, we have to compete with these countries and attract foreign investors in order to create employment opportunities in the country and be competitive internationally", he added. Minister Samarasinghe noted that this is a political opportunity for the JVP. As usual they will go to the streets and mislead the people for their own political survival, he added. (by Jayantha Sri Nissanka)

From http://www.dailynews.lk/ 01/06/2003

Government Will Mobilise Local, Global Resources to Develop Lanka - FM

The government intends to mobilize all local and international resources to develop Sri Lanka as one country, Foreign Minister Tyronne Fernando said addressing a ceremony on Saturday at the Ministry premises to hand over five ambulances which were donated by Japan at his request. "The assistance of Japan is significant at this particular juncture where we are in the process of rebuilding a nation that was devastated by long conflict," the Minister said. An ambulance, with its state-of-the-art equipment similar to a mobile intensive care unit, is worth Rs. 10 million. They were distributed among Moratuwa MMC, Dehiwala-Mount Lavinia MMC, Kandy MMC, Seethawakapura UC and the mobile medical unit of the Ministry of Public Administration. The function was to coincide with ceremonies to mark Minister Fernando's completion of 25 years in Parliament. "Little Sri Lanka helped Japan in early 50s to rise up from ashes. President Jayewardene's words at the San Francisco Peace Summit made the situation favorable to Japan. Today Japan is helping us to develop Sri Lanka which has been ruined by a two-decade war," the Minister said. The Government is determined to mobilize all resources available in the country, even with LTTE, in order to develop Sri Lanka as one country. It is not easy for those who were in jungles for more than two decades to come out and get adjusted to accepted norms and practices. But we are happy that they are progressing. Let us all be sincere in this effort and join hands to develop our Motherland, the minister added. N. Navaratnarajah, Consultant to the Foreign Minister addressing the gathering thanked the donors in Japan, mainly the Japanese Fire Fighters' Association, for making all arrangements with the assistance of Sri Lankan Embassy in Tokyo and its Seva Vanitha Unit. Minister's Coordinating Secretary Lal Peiris commended the initiative of the minister to get these latest high-tech ambulances.

From http://www.dailynews.lk/ 01/13/2003

PAKISTAN: Amendment in Local Govt. Ordinance 2001

LAHORE, Pakistan (PNS): - The Punjab Chief Minister Ch. Pervez Elahi Thursday approved an amendment in Local Government Ordinance 2001,under which no-confidence resolution could not be moved against the district nazims till June 30, 2003. According to a handout, the approval has been given in this regard by the chief minsiter while presiding over a high level meeting here today. Chief Secretary Punjab, Hafeez Akhtar Randhawa, Home Secretary Brig.(retd) Ijaz Ahmed Shah and Secretary Local Government Ismail Qureshi attended the meeting. On this occasion, the Chief Minister said that the present government wants continuity, stability and success of the district governments. He said that after this decision, the atmosphere of uncertainty will end and the district nazims will discharge their duties with full confidence. Ch. Pervez Elahi said that present government believes in district government system which would ensure the safeguarding of peoples interest. He further said that the elected assembly members and the district nazims will jointly play their role for the welfare of the people.

From http://www.paknews.com/ 01/03/2003

Law, Order Moot

RAWALPINDI-- An inter-provincial conference on law and order will be held in Karachi on Jan 11, an official source told Dawn on Friday. This will be the first conference after the formation of the Jamali government. Interior Minister Faisal Saleh Hayat will preside over the conference, which will be attended by chief secretaries, home secretaries and the inspectors general of police of all the provinces and the federal capital, the source said. He said that the prevailing law and order situation in the country would be on the top of the conference agenda. The police chiefs are expected to present reports on crime situation and police performance in their respective areas to the interior minister. The conference is likely to discuss the steps to control terrorism, strategies adopted by the law enforcement agencies to recover illicit weapons, police reforms and powers given to the police officers in the new act and improvement of conditions in jails, the source said. The previous six inter-provincial conferences were held during the tenure of Moinuddin Haider. The last conference was held in Lahore on Feb 16, 2002.

From http://www.dawn.com/ 01/05/2003

Musharraf Heads Pak's Nuclear Command

ISLAMABAD: In sharp contrast to the Indian nuclear command control system which is wrested with the civilian authority headed by Prime Minister Vajpyaee, Pakistan's nuclear command structure has been placed under the control of military-dominated National Command Authority (NCA) headed by President Pervez Musharraf. The NCA which also includes Prime Minister Mir Zafarullah Khan Jamali is authorised to take a "unanimous decision" for using nuclear weapons unlike a civilian structure worked out by India. The decision to use nuclear weapons, however, is not wrested with Musharraf or any individual but the NCA would take a unanimous decision, local daily Dawn said in a report on the country's secretive nuclear command structure, while reporting on a special presentation on the command structure made by NCA to Jamali on Monday. Jamali along with Musharraf and Foreign Minister Khurshid Muhammad Kasuri were given a detailed briefing on the country's nuclear command structure by the NCA officials. Barring Jamali and Kasuri the other officials who attended the briefing were the top brass of the country's military which included the service chiefs. The newspaper said while the NCA was headed by Musharraf, Jamali was made a member of it. It is still not clear whether the present military dominated nuclear command structure was a permanent feature as despite the dominant role being played by Musharraf in the present power structure, Pakistan continued to be a parliamentary democracy.

From http://timesofindia.indiatimes.com/ 01/07/2003

Pakistan's Commitment to Reforms Satisfies IMF

The International Monetary Fund said Monday it was satisfied with assurances by Pakistan's new civilian government that it would stick to a reform path launched three years ago. George Abed, director of the IMF's Middle Eastern department, told a news conference he expected the fund's board to meet in February to decide on the release of the next $115 million of a $1.31 billion loan to Pakistan agreed in December 2001. Pakistan's senior financial official Shaukat Aziz told the news conference the government had told the IMF it would stick to the economic reform path pursued over the past three years. "We said that we believe in continuity of reforms, because it we stay on course we will get higher growth," said Aziz, who is adviser to Prime Minister Mir Zafarullah Khan Jamali on finance. Abed said he would tell the IMF board he was "content and satisfied" with assurances that reforms initiated in 2000 by military President Pervez Musharraf, would continue with the new civilian administration installed in November. "The continuity is there, the commitment is there," he said. Abed said the IMF was confident Pakistan would meet a budget deficit target of 4.6 per cent of GDP for the fiscal year to June 30. Pakistan has set a fiscal deficit target of four per cent for this fiscal year. An IMF official said the difference in the targets was the result of different methods of calculation used by the government and the fund. The IMF loan to Pakistan is intended to help battle poverty and offset the impact on its economy of the war in neighboring Afghanistan. Pakistan received $115 million in November as the fourth tranche and the IMF says timing of the disbursement of the fifth will depend on the assessment of Abed's mission. The IMF and other donors to Pakistan have expressed concern about Jamali's decision to cut electricity tariffs last month without consulting the country's power sector regulator. But Abed, who met both Jamali and Musharraf, said he was sure the role of the regulatory bodies would be strengthened. "We have every reason to believe that it will continue," he said.

From http://www.dailystarnews.com/ 01/22/2003

TOP↑

Speaking at a press conference in Yerevan on 10 January, Foreign Minister Vartan Oskanian said that progress was registered last year with regard to both regional and global aspects of foreign policy and in the search for a solution to the Karabakh conflict, Noyan Tapan reported. He said that Kocharian will meet again with his Azerbaijani counterpart Heidar Aliev before the end of this month to continue their talks on Karabakh. Oskanian noted positive shifts in Armenian-U.S. relations in 2002 including the expansion of bilateral military cooperation. He also noted progress in Armenian-Turkish relations as reflected in three meetings with his Turkish counterpart, but at the same time admitted to disappointment at the hard line adopted by the new Turkish government toward a possible rapprochement with Armenia, RFE/RL's Yerevan bureau reported.

From http://www.rferl.org/ 01/13/2003

GEORGIA: Georgian Security Official Envisages Nato Membership in 2006

In an interview published on 15 January in "Vremya novostei," National Security Council Secretary Tedo Djaparidze said he believes Georgia could enter NATO in 2006. He said Georgia's aspiration to join the North Atlantic alliance is dictated by the need to "enter any organization that can guarantee Georgia's security on the path that it has chosen." Djaparidze also told Interfax on 15 January that he believes unifying the Black Sea and Baltic security systems would be advantageous in that it would give NATO "a connection with its flank commands in the north and south through Georgia and the Eastern European countries that recently joined the alliance."

From http://www.rferl.org/ 01/16/2003

IRAQ: U.S. is Completing Plan to Promote a Democratic Iraq

WASHINGTON— President Bush's national security team is assembling final plans for administering and democratizing Iraq after the expected ouster of Saddam Hussein. Those plans call for a heavy American military presence in the country for at least 18 months, military trials of only the most senior Iraqi leaders and quick takeover of the country's oil fields to pay for reconstruction. The proposals, according to administration officials who have been developing them for several months, have been discussed informally with Mr. Bush in considerable detail. They would amount to the most ambitious American effort to administer a country since the occupations of Japan and Germany at the end of World War II. With Mr. Bush's return here this afternoon, his principal foreign policy advisers are expected to shape the final details in White House meetings and then formally present them to the president. Many elements of the plans are highly classified, and some are still being debated as Mr. Bush's team tries to allay concerns that the United States would seek to be a colonial power in Iraq. But the broad outlines show the enormous complexity of the task in months ahead, and point to some of the difficulties that would follow even a swift and successful removal of Mr. Hussein from power, including these: Though Mr. Bush came to office expressing distaste for using the military for what he called nation building, the Pentagon is preparing for at least a year and a half of military control of Iraq, with forces that would keep the peace, hunt down Mr. Hussein's top leaders and weapons of mass destruction and, in the words of one of Mr. Bush's senior advisers, "keep the country whole." A civilian administrator — perhaps designated by the United Nations — would run the country's economy, rebuild its schools and political institutions, and administer aid programs. Placing those powers in nonmilitary hands, administration officials hope, will quell Arab concerns that a military commander would wield the kind of unchallenged authority that Gen. Douglas MacArthur exercised as supreme commander in Japan. Only "key" senior officials of the Hussein government "would need to be removed and called to account," according to an administration document summarizing plans for war trials. People in the Iraqi hierarchy who help bring down the government may be offered leniency. The administration plan says, "Government elements closely identified with Saddam's regime, such as the revolutionary courts or the special security organization, will be eliminated, but much of the rest of the government will be reformed and kept." While publicly saying Iraqi oil would remain what one senior official calls "the patrimony of the Iraqi people," the administration is debating how to protect oil fields during the conflict and how an occupied Iraq would be represented in the Organization of Petroleum Exporting Countries, if at all. After long debate, especially between the Pentagon and the State Department, the White House has rejected for now the idea of creating a provisional government before any invasion. Officials involved in the planning caution that no matter how detailed their plans, many crucial decisions would have to be made on the ground in Iraq. So for now they have focused on legal precedents — including an examination of the legal basis for taking control of the country at all — and a study of past successes and failures in nation building, reaching back to the American administration of the Philippines after the Spanish-American War. The plans presented to Mr. Bush will include several contingencies that depend heavily, officials say, on how Mr. Hussein leaves power. "So much rides on the conflict itself, if it becomes a conflict, and on how the conflict starts and how the conflict ends," one of Mr. Bush's top advisers said. Much also depends on whether the arriving American troops would be welcomed or shot at, and the Central Intelligence Agency has been drawing up scenarios that range from a friendly occupation to a hostile one. (by David E. Sanger and James Dao)

From http://www.nytimes.com/ 01/06/2003

KYRGYZSTAN: Kyrgyzstan Extends Moratorium on Death Penalty

President Askar Akaev signed a decree on 8 January extending for another year the moratorium on the death penalty first introduced for two years in December 1998, RFE/RL's Kyrgyz Service reported. The moratorium has since twice been extended for 12 months. Tursunbai Bakir-uulu, who was named Kyrgyzstan's first ombudsman late last year, announced in December that he will propose to Akaev abolishing capital punishment altogether in line with Kyrgyzstan's adoption of human rights as a key tenet of its national ideology.

From http://www.rferl.org/ 01/09/2003

Kyrgyzstan: Constitutional Referendum Culminates Five Months of Heated Debate

In announcing the date for a nationwide referendum on changes to the Kyrgyz Constitution, President Askar Akaev yesterday said he believes the final version of the constitution is appropriate for a country that has made the transition from the post-Soviet period to democracy. He said he believes the new version will contribute to harmonious relations among the various branches of power and between the authorities and civil society. "I believe that today we are getting a constitution that meets the requirements of a post-transitional period and harmonizes the relations among the different branches of power, between the authorities and the people, and within the civil society. I believe that the adoption of the new constitution will strengthen our leadership in the transformation to democracy," Akaev said. In the referendum, voters will be required to answer the following two questions with either a "yes" or "no": 1. Should the law of the Kyrgyz Republic "On a new version of the constitution of the Kyrgyz Republic" be adopted? 2. Should Askar Akaev remain president of the Kyrgyz Republic until December 2005 (to the end of his constitutional term) in order to implement the approved constitutional amendments? Akaev said the final version of the constitution is a compromise. He said he had made certain concessions specifically to appease the opposition. He also criticized the Kyrgyz parliament for what he termed its reluctance to cede any of its powers, even in the interest of solving the country’s serious economic problems. The 2 February referendum will mark the culmination of five months of heated debate about the optimum division of power among the president, the government, and the parliament in Kyrgyzstan. On 26 August, Akaev signed a special decree on forming a 40-member Constitutional Council tasked with drafting amendments to the constitution that would redistribute some of the president’s powers between the parliament and local authorities. These proposed changes were almost certainly meant as a tactical concession on Akaev’s part in response to calls for his resignation. They came after five months of opposition criticism of the Kyrgyz leadership in the wake of clashes in mid-March in the southern district of Aksy, in which police shot dead six demonstrators. According to the decree, the Constitutional Council was to start working on 4 September under the chairmanship of Akaev himself to prepare reforms that would then be published for nationwide discussion before being approved in November. Akaev addressed the Constitutional Council on 4 September, emphasizing the need for constitutional reforms and suggesting replacing the existing bicameral parliament with a unicameral one in 2005, the year Akaev would leave office. On 20 September, the Constitutional Council announced that it would not be able to prepare a package of amendments to the constitution by the original deadline of 23 September. Apparently, the council was unable to agree on authorities of a new government and reforms to the judicial system. By 31 October, the number of proposed amendments to the constitution had reached more than 100. Therefore, it was decided to extend public discussion of them for a further two weeks, from 18 November to 2 December. On 22 November, the Central Election Commission announced that a nationwide referendum on changing and amending the Kyrgyz Constitution would be held on 22 December. But Akaev twice postponed the referendum, first to 2 January and then to 2 February. Opposition politicians have been swift to criticize individual constitutional amendments. Leading opposition deputy Adaham Madumarov pointed out that not only the opposition but also Constitutional Court Chairwoman Cholpon Baekova herself, as well as "people loyal to the president," have criticized the planned amendments. A second parliamentary deputy, Ishenbai Kadyrbekov, predicted that once the amendments have been approved, Akaev will dissolve the present parliament. "Not only the opposition, but others have also opposed [the president’s draft text of the new constitution] during today’s meeting of the Constitutional Council. Among them was the chairwoman of the Constitutional Court, a representative of the Central Election Commission, and people who are loyal toward the president. About 99.9 percent of the Constitutional Council participants have been against the text that is to be proposed for a referendum," Kadyrbekov said. But First Deputy Prime Minister Kurmanbek Osmonov said yesterday that the present parliament and government will serve out their full terms in office. Akaev also named a team of experts early this month and assigned it to handle the final editorial changes to the amendments prepared by the Constitutional Council. But 11 opposition members of the Constitutional Council protested that move. In an open letter to Akaev on 10 January, they accused him of violating the constitution by proposing to hold a referendum before parliament had adopted a law on referenda and of violating the prerogatives of the council by submitting its proposed draft amendments to a separate experts’ group for editing. They also accused Akaev of trying to change the constitution according to his wishes, and demanded that the 4,500 suggestions made during the public discussion of the draft amendments be made public. In an interview with the Kyrgyz website akipress.org on 10 January, Baekova implicitly supported the opposition’s objections. She said a minimum of six months is needed for the experts’ group to review the proposed constitutional amendments. She proposed postponing the referendum until 2004. But Osmonov on 11 January rejected the accusations, saying that the experts’ group will only "classify" the amendments and rephrase them in the appropriate legal terminology.

From http://www.eurasianet.org/ 01/18/2003

Kyrgyz Government Hints That Constitutional Amendments Might Be Revised...

First Deputy Prime Minister Kurmanbek Osmonov told the Legislative Assembly (the lower chamber of Kyrgyzstan's parliament) on 20 January that a team of experts will reconsider two controversial draft amendments to the constitution that grant the president the absolute right of veto and deprive citizens of the right to appeal to the Constitutional Court, RFE/RL's Kyrgyz Service reported. But Djypar Djeksheev, who is deputy head of the opposition headquarters established on 17 January to monitor preparations for the 2 February national referendum on the draft amendments, said that simply changing those two articles in the draft is not enough. He said the opposition wants the existing draft to be abandoned and replaced with that approved by consensus by the Constitutional Council. Legislative Assembly speaker Abdygany Erkebaev told a press conference on 20 January that he opposes the clauses giving the president an absolute-veto right and that granting former presidents and their families immunity from prosecution.

From http://www.rferl.org/ 01/21/2003

KAZAKHSTAN: Updating Kazakhstan's Education Sector Strategy

MANILA, PHILIPPINES - ADB has approved a technical assistance (TA) grant for $600,000 equivalent to help strengthen the education sector development strategy of the Government of Kazakhstan. The TA seeks to identify key sector issues and priorities and contribute to strengthening the Government's education sector development strategy. This will help the Government to prepare a strategy for reform, as well as organization and financing plans. The update will incorporate lessons from recent interventions firm up the sector reform framework of the Government up to 2010 suggest ways to build on sector work and projects supported by ADB and Government reform initiatives. A severe economic downturn after independence squeezed public financing for education, which dropped from 6% of gross domestic product in 1991 to about 3% in 1994, before rising to 4% in 1999. The Government has taken steps to reform the sector. But it faces challenges in maintaining generally high standards and literacy rates, while improving funding, management and quality. The TA will draw up a process for policy reform, an agreed financial planning, management and monitoring system, and a framework for effective aid coordination. It will be carried out over 12 months to January 2004.

From http://www.adb.org/ 01/02/2003

Experts See Limited Progress in Kazakhstan’s Aids Policy

Kazakhstan has broken away from other Central Asian nations by acknowledging that AIDS is a crisis threatening the entire country, two experts have concluded after interviewing nearly 80 high-risk people in Kazakhstan cities. But the experts say that Kazakhstan’s police and public health services still isolate people with human immunodeficiency virus (HIV) and make life more dangerous for high-risk groups. AIDS is spreading faster in the Former Soviet Union than anywhere else in the world, Human Rights Watch expert Joanne Csete told an Open Forum of the Open Society Institute’s Central Eurasia Project on January 9. With colleague Marie Struthers, Csete, who heads the organization’s HIV/AIDS and Human Rights program, interviewed people with HIV in several Kazakhstani cities during 2002. HIV is the disease that causes AIDS. "A wide range of human rights abuses are fueling this epidemic," Csete told the audience. "People living with HIV/AIDS in Kazakhstan face deep stigma, and also abandonment by their families," she said. "Quarantining them, demonizing them, criminalizing them" combined with keeping registries of all those who test positive, make it less likely that high-risk individuals, like intravenous drug users, sex workers or men who have sex with men will volunteer to be tested. The experts reported that Central Asian governments had ignored two lessons from the spread of AIDS in Africa: that isolating and shaming high-risk people like intravenous drug users tends to propel HIV infection rates, and that working with high-risk groups can discourage the spread of infection and help sick people find medicine. Csete and Struthers encouraged a "harm reduction" approach, which emphasizes reducing individual and social harms associated with certain high-risk behaviors. Kazakhstan, they said, carried on counter-productive Soviet policies including mandatory testing of people arrested on drug-related crimes and isolation of prisoners who tested positive for HIV. Since police often torture prisoners or plant evidence to meet arrest quotas, the speakers said, drug users and other high-risk individuals rarely seek out help or medicine. Nonetheless, the speakers found some policies to encourage as Kazakhstan confronts the epidemic. After inheriting a network of AIDS centers that the Soviet Union set up in 1987, Kazakhstani President Nursultan Nazarbayev has become aggressive in recent months about preventing new cases. "Some potentially very positive steps have occurred," said Struthers. In August 2002, Struthers said, the government announced that it would stop forcing HIV tests on everyone it arrests and would stop segregating prisoners who have HIV. Struthers also said the country plans to open two methadone clinics by the end of March, which would help heroin addicts stop using needles that can transmit the disease. The president has initiated a plan to examine easing penalties for drug-related offenses, making it easier for intravenous drug users to come forward for testing and treatment. In recent comments on HIV, Kazkahstani authorities have cast the disease as a society-wide threat rather than a condition for criminals. "The problem goes beyond the framework of the healthcare system, since the spread of AIDS might lead to a fall in the birth rate, the ageing of society, the loss of able-bodied people," Deputy Health Minister Anatoliy Belonog wrote in an August 24 article in Kazakhstanya Pravda. "Therefore, it is our duty to prevent the spread of this horrible disease." The treatment of HIV as a national infection marks Kazakhstan as relatively progressive. However, the speakers warned that steep barriers continue to block effective harm reduction. One is that Kazakhstan’s police culture, which imposes arrest quotas on underpaid officers, encourages police to intimidate the people who should seek medicine and health counseling. "Intravenous drug users make wonderful arrest targets" for quota-filling, said Struthers, since they can be arrested for possession of relatively small amounts. They frequently face beatings or torture that make them unlikely to seek or obtain good medical oversight. The speakers said that sex workers, who have become more plentiful in recent years and who normally do not carry registration documents, are particularly vulnerable to arrest and harassment. The authorities’ poor treatment of people without proper papers points up another problem, Csete said: the extent of sufferers in the country is very hard to pinpoint. "Official numbers, based on registrations which are used to violate confidentiality, are fictional," said Csete. She said the Kazakhstani government acknowledged 25,000 cases which exceeds the official combined count that the other four Central Asian republics report, but that the real extent of the disease is "anybody’s guess." Consensus holds that tuberculosis an illness often associated with AIDS that is endemic to the region fuels mortality rates, while other sexually transmitted infections which can make HIV more dangerous propel AIDS rates. Kazakhstan, Csete said, has the highest tuberculosis burden in Central Asia and the highest incidence of syphilis of any country in the World Health Organization’s relevant regional office. Kazakhstan has shown somewhat more candor about the disease than its neighbors. State television reported on September 5 that "The number of HIV sufferers increased by 238 percent last year alone, which is one of the highest figures in the world." In Kyrgyzstan, meanwhile, an August 13 report listed the number of HIV-positive people in the country at 300. Despite Kazakhstan’s apparent sobriety about the threat that AIDS poses to public health, speakers said, the country may not have the resources it needs to attack the problem. Persistent patterns of arbitrary arrest and corruption, they said, discourage high-risk people from seeking the help they need. More important, speakers said, "a lot of attention is being paid to [this epidemic] in rhetoric. But in budgets, nothing." The country’s five-year plan, Csete noted, would reportedly cost $150 million over five years. "The government," she added, "is seeking $147 million of that money from outside sources." As AIDS and its consequences continue to spread, the speakers warned that a real change in political culture may be necessary before Kazakhstan can mount an AIDS strategy that can teach lessons to its neighbors.

From http://www.eurasianet.org/ 01/15/2003

President's Statement on Democracy and Market

"We want to become a democratic State, based on market economy. But while transferring to a liberal regime one shouldn't lose hold of the reins of power". Nursultan Nazarbaev, president of RoK has stated that at a press conference in Bern, the Swiss newspaper "Le Temps" reports. In relation with this the president of RoK observed that "in comparison with Switzerland Kazakhstan started its history 10 years ago after 74-year Soviet regime". Responding to the questions of Swiss press about the harsh treatment of some journalists, head of Kazakhstan reminded that the constitution of Kazakhstan forbids to mass media to create ethnic and religious hosilities or abuse the citizens dignity. Those, who break these rules are punished. We know that Kazakhstan does not correspond with European democratic criteria so far. For us democracy will be the end of the road that is constructed in pain".

From http://www.gazeta.kz/ 01/22/2003

TAJIKISTAN: 'Not Ready' to Abolish Capital Punishment

Asia Plus-Blitz on 8 January quoted Mahmadali Vatanov, who is first deputy chairman of Tajikistan's Supreme Court, as saying that fewer persons were sentenced to death last year and no one was sentenced to death for drug-related crimes. Deputy Prime Minister Saidamir Suhurov, who chairs the Human Rights Commission established last year (see "RFE/RL Newsline," 5 June 2002), told Asia Plus-Blitz that the number of articles of the Criminal Code that include the death penalty has been cut over the past few years from 36 to 14, which he claimed is "progress" for a country that has recently experienced a civil war. But Suhurov, like Vatanov, argued that it is premature to abolish capital punishment. He noted that a recent public-opinion poll established that 73.4 percent of respondents favor retaining the death penalty.

From http://www.rferl.org/ 01/08/2003

TURKMENISTAN: Adopts New Election Law

The Turkmen press has published the country's new election law, turkmenistan.ru reported on 7 January. Turkmen citizens who are at least 25, have not been convicted of a crime, and have lived in Turkmenistan for at least 10 years prior to the ballot may run in elections. AP reported on 3 January that elections to a new 50-seat parliament have been scheduled for 6 April.

From http://www.rferl.org/ 01/08/2003

UZBEKKISTAN: Government Tightens Antismuggling Measures

Uzbekistan has intensified customs and border controls to combat the smuggling of inferior Chinese commodities into Uzbekistan, Interfax reported on 20 January, quoting an unidentified Uzbek government official. The goods are primarily smuggled through Kazakhstan. The official said that up to 20 unofficial markets have been established in regions of Kazakhstan and Kyrgyzstan that border on Uzbekistan, at which Uzbek citizens purchase small quantities of such goods and bring them into Uzbekistan illegally.

From http://www.rferl.org/01/21/2003

Uzbekistan Blocks Access to Internet Defamation of President

Access in Uzbekistan to the website centrasia.ru has been blocked, although the government has disclaimed responsibility for doing so, according to "The Washington Post" and centrasia.ru on 21 January. On 13 January, the site posted a lengthy article by political scientist Usman Khaknazarov (the name is believed to be a pseudonym) giving details of how Islam Karimov engineered his election to the post of first secretary of the Communist Party of Uzbekistan in the late 1980s and of his relations with Afghan Deputy Defense Minister General Abdul Rashid Dostum and the various Uzbek "clans" engaged in drug trafficking.

From http://www.rferl.org/ 01/21/2003

JOHN Howard has given the green light for the deployment of Australian forces in a US-led invasion of Iraq. While stressing he still believed war could be avoided, Mr Howard said deployment of up to 1650 Australian personnel – including special forces troops – three naval ships and up to 14 F/A-18 fighter jets – to the Iraq theatre could start within weeks. The Prime Minister said the military needed to be prepared for war, even while UN weapons inspectors continued their search for evidence of weapons of mass destruction. "The Australian Government has not yet taken a decision to be involved in military action," he said. "(But) it could be over the weeks ahead that there will be some forward deployment of assets and personnel to the region." While the UN's January 27 deadline for Iraqi compliance with disarmament resolutions now shapes as the decision point for war or otherwise, Mr Howard also cautioned against "assuming we'll know on the 27th or the 28th what the outcome will be". "The weapons inspectors should be given a proper opportunity to work and a proper opportunity to succeed." The Prime Minister's announcement came within hours of UN chief weapons inspector Hans Blix telling the Security Council that although "we haven't found any smoking guns" Iraq had not shown active co-operation. In a three-hour briefing alongside Mohamed ElBaradei, director-general of the International Atomic Energy Agency, Dr Blix said Iraq's 12,000-page weapons material declaration was "rich in volume but poor in new information". Dr Blix was especially critical of Iraq's failure to give a full list of scientists involved in weapons programs. "We do not feel that the Iraqi side has made a serious effort to respond to the request we made." US Secretary of State Colin Powell insisted: "If the international community sees that Saddam Hussein is not co-operating in a way that would not allow you to determine the truth of the matter, then he is in violation of the UN resolution . . . you don't really have to have a smoking gun." Dr Blix and Mr ElBaradei will ask Iraq for a full list of scientists when they visit Baghdad on January 19. Mr ElBaradei said aluminium tubes Baghdad had tried to import in the past two years were for building rockets, not centrifuges to enrich uranium, as the Bush administration had claimed as evidence that Mr Hussein was trying to restart Iraq's nuclear programs. But questions remained over anthrax and the importation of "bacterial growth media", reported Dr Blix, who noted Iraq had declared purchases of missile engines and material to make solid missile fuel, in violation of UN resolutions. Mr Howard and cabinet's National Security Committee were briefed yesterday by the Chief of the Defence Force, General Peter Cosgrove, and defence intelligence and security agency chiefs on progress of contingency plans. But Simon Crean accused Mr Howard of pretending to want a diplomatic solution "but all his talk is about preparing for war". Australia's complement is likely to include 150 SAS troops, a command headquarters, two frigates and an amphibious command ship, up to 14 F/A-18 aircraft and two P3-C Orion maritime patrol aircraft. The US already is massing 100,000 troops in countries neighbouring Iraq, and Britain has pledged up to 20,000 troops and a carrier battle group to the coalition force. (by John Kerin and Rodney Dalton)

From http://www.theaustralian.news.com.au/ 01/11/2003

Federal Backing for New Property Laws

The states have been beating on the Federal Government's door for tough new laws to protect property investors, only to find the door was already open. Last week NSW joined Queensland to push for a national regulatory scheme that would curb sharp practices in the property investment market. They want to raise the level of regulation for property investments to that which applies to financial investments. The NSW Minister for Fair Trading, John Aquilina, and his Queensland counterpart, Merri Rose, challenged the Government to declare its position. But Senator Ian Campbell, the architect of the Howard Government's corporations law reforms, said Commonwealth Government support was never in doubt. "We're both talking the same language," Mr Campbell said. "It is an area that does require a better national regime, a uniform approach, and the Commonwealth would very strongly support the Queensland initiative and I'm very pleased to see NSW on board as well." Ms Rose will recommend "national legislative action" at the June Ministerial Council on Consumer Affairs. Mr Campbell has indicated that the Federal Government would support either uniform legislation between the states or bringing property investment within the ambit of the investment laws that currently apply to financial services in the Commonwealth Corporations Law. But Mr Campbell said general property investment regulation might be best left to the states. "The practical thing is that states licence property agents, discipline them and disbar them for breaking the rules," Mr Campbell said. "The most effective way to do it is for states to create a uniform code. "The Commonwealth will welcome it, facilitate it and ensure it dovetails in with the existing Financial Services Reform licensing regulations," he said. The Australian Securities and Investments Commission would need more resources to shoulder the burden of administrating the new property investment regime, as it is already in the process of licensing 8000 to 12,000 financial advisers. ASIC is looking closely at property marketers that make claims about property investment returns, but their efforts to police property spruikers have been hamstrung by an explicit carve-out that excludes property investments from the Corporations Law. ASIC recommended a uniform national approach to property investment laws in 1999. "ASIC agrees there should be a uniform national approach to make the jurisdictional issues clear," a spokeswoman for the corporate regulator said. She said whether it should be a Commonwealth or state regime was "an issue for governments to determine". (by John Garnaut)

From http://www.smh.com.au/ 01/13/2003

New Bill to Block Tweed Trading

The Federal Government has conceded it cannot do anything about the activities of share dealer David Tweed without introducing new legislation. Ian Campbell, parliamentary secretary to the Treasurer, said on Friday he planned to put a bill before Parliament in the autumn session that would force dealers to give more information when they made unsolicited offers to buy shares. Mr Campbell said the dealers would have to give as much prominence to the current market price of shares as to their own offer prices. Mr Tweed, who operates out of a house in West Melbourne, targets small shareholders who have little experience in the market. He sends out thousands of written offers to buy shares at prices well below market value, but dresses them up to make them appear better than they are. A report in the Herald in November revealed how Mr Tweed and other operators had enjoyed a bountiful year as stockmarket uncertainty unsettled private shareholders. Mr Tweed had offered to buy shares at less than two-thirds of their worth and had accumulated enough shares to enter the list of top 20 shareholders in several companies before selling his holdings at a large profit. A former runner with a Melbourne stockbroker, he has been operating in this way for nearly 10 years but the introduction of the Financial Services Reform Act last March lifted restrictions requiring him to hold a dealers' licence and made it easier for him to operate. Until then, the Australian Securities and Investments Commission had forced him to include the market value of the shares he was offering to buy. Mr Tweed then stepped up the pace of his operation and concentrated on people who had acquired their shares when old insurance mutuals and farm commodity co-operatives demutualised and listed on the stock exchange. In November, AMP, AXA Asia Pacific and Bendigo Bank warned shareholders against accepting offers that were at least 30 per cent below market value. IAG has also warned shareholders about these activities and complained to ASIC. (by David Elias)

From http://www.smh.com.au/ 01/13/2003

PM Won't Be Swayed by Public

PRIME Minister John Howard has said public opinion will not rule his decision on Australia's future involvement in Iraq. Mr Howard said he believed many Australians were "not feeling strongly either way at the moment" about the prospect of war. "I will take what I think is the right decision in Australia's long-term interests," he told radio 3AW today. "I will weigh public opinion, I will listen to the public. "In the end, however, on this as on other issues such as the introduction of a new tax system and a number of other things, I won't just be swayed by the latest opinion poll." Mr Howard said while public opinion would not be the ultimate deciding factor, he would not disregard it either. "You can't make great national decisions based on that (public opinion), but equally you have no right as a Prime Minister to be contemptuous of public opinion," he said. "I've never been that, I'll always respect the opinion of Australians because they're very commonsense people." Earlier, Mr Howard told ABC radio: "We have not made a final decision or even a tentative decision to be involved in military conflict." Mr Howard also said today he had gone out of his way to ensure Australian troops had a proper send-off when they left for Iraq this week. They would not be subjected to the same recriminations as Vietnam veterans were, he said. Yesterday, Federal Opposition Leader Simon Crean told Australian troops leaving for the Persian Gulf he did not agree with their deployment.

From http://www.theaustralian.news.com.au/ 01/24/2003

FIJI: Archaic Law on Women Drinking to Go, Says Fiji Attorney-General

Suva (fijivillage.com/PINA Nius Online) - Fiji Attorney- General Qoriniasi Bale said a section of the country's liquor act saying women are not allowed into certain bars is archaic and will be amended. From British colonial times women have been barred from what are called "public bars" of Fiji hotels. At one time "public bars" in hotels were common in Fiji. But they have largely disappeared as drinking patterns changed. In Fiji's main cities and towns drinking is now mainly done in specialist bars, nightclubs and bars within hotels where there are no restrictions on women. The attorney-general confirmed he will be working alongside the liquor act review commission to ensure a new act that incorporates existing laws like the juvenile act.

From http://www.pacificislands.cc/ 01/01/2003

NEW ZEALAND: Government Hangs Fire on Iraq

The Government says it has issued no orders to put defence personnel on a war footing despite signs that the United States and traditional allies including Australia are readying for a showdown with Iraq. A spokesman for Foreign Affairs Minister Phil Goff confirmed it was likely there had been contingency planning but said there had been no specific instructions to the Defence Force about a possible involvement in Iraq, after reports that Australia's elite special forces have had their leave cancelled and been put on standby for war. New Zealand's position on Iraq had not changed since Mr Goff told the US in November that it was unlikely to commit combat forces, the spokesman said. The Government has told the US it is willing to consider humanitarian, medical or logistic support if the United Nations endorses a US-led invasion. Across the Tasman, it was reported that Australia's special forces were likely to play a similar role in Iraq to their one in Afghanistan, where New Zealand Special Air Service soldiers also fought. Meanwhile, Britain has ordered a naval task force and 3000 marines to head toward the Gulf and mobilised 1500 reserve soldiers for a possible war with Iraq. Tens of thousands of US combat troops are already heading to the Gulf. Two hundred thousand Americans are expected in the region by the end of February and a US battle staff has begun assembling at Camp As Sayliyah, in Qatar. The US says war with Iraq is not inevitable but there are increasing signs that it intends invading after it voiced misgivings about Iraq's commitment to disarm. The US could begin air strikes within weeks after UN weapons inspectors file their final report to the UN Security Council on January 27. New Zealand has committed a naval frigate and Orion aircraft to the Gulf of Oman, one of the biggest deployments outside East Timor in years, to hunt for al Qaeda and Taleban operatives. But the Government has ruled out the prospect of its gulf forces getting drawn into a conflict with Iraq.

From http://www.stuff.co.nz/ 01/10/2003

Clark Distances NZ from US War Talk

Prime Minister Helen Clark has distanced New Zealand from Britain and Australia's backing of a US-led invasion of Iraq without UN approval, saying there is not yet any justification for an attack. Miss Clark said yesterday weapons inspectors sent to Iraq to collect evidence had found nothing. "There's no smoking gun at the moment. And the Iraqis have cooperated to the degree necessary for (chief weapons inspector) Hans Blix to report they're cooperating. At one stage he said they weren't cooperating proactively but you can't really justify an invasion on the basis that there's only circumstantial evidence and they're not cooperating proactively." She said New Zealand's position was unequivocal and the "significant change" was not in New Zealand's stance, but that of the US and its allies. The US and Britain have reserved the right to wage their own war if the United Nations fails to force Baghdad to surrender any weapons of mass destruction and Australia has confirmed the deployment of troops to Iraq, in readiness for a possible invasion. Mr Blix is due to report to the UN Security Council on January 27 and Miss Clark said she expected a request for more time at that point. "Unless . . . something happens between now and then – they find the smoking gun or the Iraqi's don't cooperate, or get aggressive . . . I think most of the Security Council will be saying let's agree to Mr Blix's request for more time." The big question then would be whether the US was determined to invade before the end of winter in March. "But it is quite a serious step to move outside the UN framework." She calculated the odds at "52 to 48" against an invasion. "But then you observe the continued call-up in the US and the continued deployment in Britain, so I think it's fairly finely balanced." There has been a massive military build-up in the Gulf, close to where New Zealand naval frigate Te Kaha has been searching for terrorists as part of the war against al Qaeda. The Government has ruled out Te Kaha joining any invasion, but the frigate's duties include escorting coalition vessels through the Straits of Hormuz, in the Gulf. (by Tracy Watkins)

From http://www.stuff.co.nz/ 01/17/2003

Clark Says Emphasis Will Be on Continued Economic Growth

Steady progress on core policy issues, no surprises and an emphasis on continued economic growth. That is how Prime Minister Helen Clark sees the Government's agenda for 2003, and she is upbeat about New Zealand's prospects during a year of international uncertainty. "I think we can feel pretty confident," she says. "There's a general appreciation that New Zealand is doing a lot better than most places. It's certainly my impression that there's a lot more stability, certainty and growth here than in most places right now." She does not think economic growth will stay at the levels of the last two quarters, which were "phenomenal", but she believes New Zealand will still outpace most western countries. "The main uncertainties are around Iraq -- will there be intervention. If there is, what will that do to the world economy? There will probably be an immediate impact on oil prices. "I think most people's assessment would be that New Zealand is in a better position to ride out the year than most countries." Miss Clark puts the economy, education and health at the top of the Government's agenda with Finance Minister Michael Cullen concentrating on productivity improvement. "That will come out of continuing to lift skills, investment levels, pushing innovation and infrastructural improvements," she says. "On the overall fiscal side, the numbers are very, very good but we are cautious because the international economy has got its uncertainties. "We don't want to spend up to predicted growth rates that don't materialise." She says that because the Government has avoided tax-cutting strategies, it has money to spend on economic development, education, health and other priorities. Family income will be dealt with in 2004, when the Government intends helping low and modest-income families through tax credits and support measures which were signalled last year. In education, the new Tertiary Education Commission will concentrate on ways to achieve excellence and improve skills. "Over the three years of this term we want to keep moving on affordability issues," she says. "That means we will continue to constrain fees, we want to move on scholarships and bonding issues for the hard to staff areas, and bring more students into the student allowance net. "We said that by 2007 we wanted to increase the number of teachers by 3000 over the number required for role growth. We want to show progress on that." The Primary Healthcare Organisations (PHOs) will be rolled out, aimed at achieving more affordable care. "We want, by the end of the three years, to show good progress on the goal of people getting their first specialist assessment within six months, a referral, and surgery within six months." Mental health issues will be progressed through the four-year spending plan announced in 2000. In Parliament, Miss Clark intends pushing legislation that splits up TVNZ, the Responsible Gambling Bill, the Racing Bill and the big Health Practitioners Competency Assurance Bill. There will be changes to the Resource Management Act, new transport legislation, and a bill to allow the distribution of Maori fishing assets if the agreement goes through. With the moratorium on genetic engineering due to expire in October, legislation on new organisms will have to be passed. Another priority is veterans' pensions. "At the moment, if you're on it and then you take work you get sudden death on your benefit. That's got to be dealt with," she says. She is happy with the co-operation the Government gets in Parliament from the United Future Party and the Greens. "We picked up the pace in the second half of last year, and we're getting through the agenda." She does not plan to reshuffle her cabinet this year. "I'm not putting people under any pressure," she says. "In the course of the (three year) term I would look at it, because some might want to move on to new challenges. It's in the back of my mind ... it could be the first half of next year. "What I find is that ministers like what they're doing and very few want to give anything up. But there comes a point where they feel they want to move on -- I think we'll start to see them feeling like that towards the end of this year, the first half of next year." On the performance of her ministers last year, she rates them as having done "pretty well, which is not to say things are perfect but by and large I'm happy". Miss Clark does not think opposition parties are going to have a good year. "Reasonably miserable" is her prediction. "ACT is energetic, it's somewhat distracted at the moment. "National seems to have spent the summer snarling, to no effect at all. "I think they still labour under the delusion that a couple of fiery speeches in Parliament is going to turn the tide for them. It's just not working. "Winston (Peters) always has a long holiday, and good for him. He'll come back refreshed, we'll hear more about immigration. "The Greens have got the end of the moratorium to focus on this year. Life will go on. "United will carry on, looking at everything in a serious way." Does she think Bill English will still be leading National at the end of the year? "Not necessarily". And how does she intend maintaining her own high popularity rating? "Just go on telling it like it is, although it isn't always what everyone wants to hear." (by Peter Wilson)

From http://www.nzherald.co.nz/ 01/17/2003

Government Laws Give Special Rights to Maori, English Says

National Party leader Bill English says the Government is creating laws that give Maori special rights over other New Zealanders. In his first political speech for the year, Mr English said the role of the Treaty of Waitangi was one of two topics that would dominate the decade. The other was economic growth. Speaking in Auckland's North Shore, Mr English said Labour's view of New Zealand's future was for a bicultural nation "in which the Treaty of Waitangi is written into every institution, act of Parliament and government policy". "They don't see the resolution of historical treaty claims as an opportunity to close the book on some issues which have divided us. Instead, they are opening a new book of contemporary distinctions between New Zealanders on the basis of ethnicity." Mr English said the Government had created special consultation requirements for Maori, a unique status for Maori beliefs and more segregation of things Maori. It was risking throwing away 20 years of gains "by continuing down the path of division for the next 20 years". "The culture of cringing, political correctness must end. It's time to draw a line in the sand and for the people to reclaim what it is to be a New Zealander," Mr English said in his prepared speech notes. "Unless we call a halt to the policy of segregation between Maori and the rest of New Zealand, (Prime Minister) Helen Clark and her government will continue to undermine the pillars of equality and goodwill at the heart of our egalitarian democracy." Raising these issues risked being called racist or accused of Maori- bashing by the Beehive, he said. However, he said most people shared his views because every day people read about divisive new laws, failed government schemes, "a stream of bad news that undermines our common citizenship". Wrongs had been committed against Maori in the past but progress for them came from the same source as it did for other New Zealanders who had aspirations – economic opportunity. He criticised what he called the "taniwha clause" in government legislation, including the Local Government Act. In every decision a local council made it had to take account of the special relationship Maori had with land, sea, air, water and other taonga, under that legislation. "The Taniwha clause gives the force of law to spiritual beliefs of a group defined by their race. "This law will hand to some Maori groups a veto over local council decisions." Labour was changing the Resource Management Act "so ancestral landscapes for Maori will have the force of law and iwi will have a right to draw up their own resource plan which your council must take into account". Mr English said the same "malaise" affected the Government's spending programmes. At least 2400 grants ranging from $500 to more than $100,000 had been handed out under the programme formerly known as Closing the Gaps. "It appears TPK (Maori development ministry Te Puni Kokiri) officials drive around the country writing out cheques virtually at will. Some organisations appear to have received multiple grants. There are grants for economic development. There are also grants for classes in break-dancing and family reunions." He suggested "dishing out cash with no accountability" to Maori was a way of keeping Labour in power by securing Maori votes. "It's bad for Maori and bad for New Zealand because it's based on bad policy, on division instead of unity, on dependency instead of development." Mr English said a National government would "stop this nonsense". ACT deputy leader Ken Shirley said he agreed with Mr English that the "one rule for all principle" was the most serious issue facing the country at this time. Unity and development were certainly preferable to division and dependency, he said. The former National government had used its majority to vote down legislation promoted by former ACT MP Derek Quigley for full and final treaty settlements and the removal of race laws. "It now seems that National has adopted the exact position of ACT on this issue and that is commendable." Mr Shirley also said other National Party principles outlined by Mr English - including enterprise, personal responsibility, limited government and security - were core values for ACT. ACT had been "both frustrated and disappointed" by the floundering of the National Party over recent years "and we earnestly hope that they can now regroup around these principles that we share with them."

From http://www.stuff.co.nz/ 01/22/2003

Terrorism Heads Agenda of Asia Pacific Talks

Terrorism and a possible war in Iraq are expected to dominate the 11th Asia Pacific Parliamentary Forum, due to open shortly in the Malaysian capital, Kuala Lumpur. The three-day meeting will be attended by about 150 delegates from 27 member nations.Forum chairman Michael Chen, the head of Malaysia's parliament, says the meeting will also discuss piracy and drug smuggling. The forum aims to contribute to the region's peace, stability and prosperity by providing a forum for dialogue among parliamentarians. Member countries include Australia, Cambodia, China, Fiji, Indonesia, Japan, South Korea, Malaysia, Marshall Islands, Micronesia, Papua New Guinea, the Philippines, Russia, Singapore, Thailand, the United States and Vietnam.

From http://www.goasiapacific.com/ 01/13/2003

PNG: 36 Named in New Year's Honors

Port Moresby (NBC/PINA Nius Online): Former Government Chief Secretary Robert Igara and National Provident Fund Inquiry chairperson Thomas Barnett are among 36 people recognised in Papua New Guinea's New Year honors. Mr Igara and Mr Barnett have both been made Companions of the Order of Saint Michael and Saint George. Mr Igara is recognized for services to government and Mr Barnett for services to the judiciary. No knighthoods were awarded. - NBC/PINA Nius Online.

From http://www.pacificislands.cc/ 01/02/2003

PNG: Papua New Guinea to Rebuild Regional Role, Says Sir Rabbie

Port Moresby (The National/PINA Nius Online): Papua New Guinea is planning a wide ranging review of its foreign policy, including rebuilding its role as a regional leader. Foreign Minister Sir Rabbie Namaliu said the review will include: ? Possible changes in heads of missions; ? Addressing issues of growing importance to Papua New Guinea and its neighbors, such as the impact of climate change; ? Upgrading and improving facilities at Papua New Guinea's missions overseas. Sir Rabbie said: "Our policy will need to reflect the reality of a more uncertain, insecure region, and the evil of terrorism and domestic instability in particular. "It will also need to reflect the need to re-build our role as a leader in the Pacific." There will also be some innovative changes made in the visa system to attract investment in the private sector, he said. Sir Rabbie said in his New Year message to overseas posts and officers of the Department of Foreign Affairs and Immigration that he wants the review process to be as wide ranging and genuine as possible. In that regard, he would not only seek the input of all Foreign Affairs officers, he wants officers to encourage genuine community participation. Sir Rabbie said: "There will be changes to heads of missions made in the near future. "I seek the cooperation of all officials here and abroad in ensuring the changes are implemented smoothly and efficiently and our new heads of missions and consuls are given every assistance as they prepare to assume their important duties. "I appreciate that under-funding in recent years has diminished the department's capacity to provide quality representation overseas, and sound foreign policy advice at home. "There are better times ahead and the appointment of new heads of missions, and repair and maintenance of premises will help lift morale and the ability of our posts to effectively represent our nation." On the visa system reforms, Sir Rabbie said these would be carried out in conjunction with reforms to the work permit and business approval processes. These reforms would streamline approval procedures, and minimise to the greatest possible extent corruption and abuses in these processes, whether by officials or by clients, he said. "We must have a 'zero tolerance policy' when it comes to the abuse and corruption of these important processes," he said. "Neither I nor the community will accept anything less than that." - The National/PINA Nius Online.

From http://www.pacificislands.cc/ 01/02/2003

VANUATU: Vanuatu's New Kava Growing Laws Called Discrimination, Face Challenge

Port Vila (RNZI/PINA Nius): Pentecost Island paramount chief, lawyer and former parliamentarian Vincent Boulekone is vowing to challenge the constitutionality of new legislation governing who can farm kava in Vanuatu. The bill, which was passed by Parliament at the end of last year, but is yet to be signed into law, bars all mixed race and naturalised citizens from farming kava. They will be allowed to deal in kava, but will have to buy it from indigenous ni-Vanuatu farmers, who will hold exclusive rights to farm the crop. Mr Boulekone said all mixed raced people and naturalized citizens living in the country are allowed the same rights under the constitution as the indigenous Ni-Vanuatu. The government bill was introduced to end the domination of a handful of mixed race and naturalised citizens who have been successful kava farmers and exporters. RNZI/PINA Nius.

From http://www.pacificislands.cc/ 01/07/2003

Controversial Vanuatu Bills Get Go Ahead

Port Vila (RNZI/PINA Nius): Vanuatu’s head of state, President Father John Bani, has signed two controversial bills into law in spite of a growing outcry from the public. The bills are: the Debit Tax Bill, which will deduct about 10 cents from bank transactions of $US10 or more, and the Kava Bill, which bans all but indigenous ni-Vanuatu people from farming kava. Non Government Organizations (NGOs) have criticized the debit bill, saying it will adversely affect grassroots communities. A growing number of racially mixed or naturalised citizens have attacked the Kava Bill as racist. They say it will promote apartheid by giving indigenous farmers exclusive rights to farm the crop. They say that the bill goes against their constitutional right as citizens to be treated the same as indigenous in-Vanuatu. - RNZI/PINA Nius.

From http://www.pacificislands.cc/ 01/15/2003

Five Mideast Countries to Set Up Regional Eurocontrol Office in Cyprus

NICOSIA, (Xinhuanet) -- Cyprus, Jordan, Egypt, Lebanon and Syria has decided to set up a regional office of European Organization for the Safety of Air Navigation (Eurocontrol) in Cyprus to manage air transport, the Cyprus News Agency reported here Saturday. The five Mideast countries will sign a protocol about it on Feb.4 in Nicosia, the report said. 　　According to the protocol, Middle East countries would accept European policies on matters of air transport through the regional Eurocontrol office in Cyprus. "These countries will be coordinated by the office in Cyprus, which will help them implement European policies in the field of Civil Aviation," Christos Petrou, head of Eurocontrol's department of foreign affairs and public relations, noted. He said the decision for the creation of the permanent regional Eurocontrol office in Cyprus, not in any other country, is based onthe fact that "Cyprus is the only country in the region which belongs to both Eurocontrol and the European Union." 　　"The fact that Cyprus is a bridge between Europe and the Middle East is implemented in action," Petrou added. It was reported that the initiative to create a regional Eurocontrol office was proposed by Cypriot Minister of Communications and Works Averof Neophytou two years ago.

From http://news.xinhuanet.com/ 01/19/2003

Closer Government to Business Partnership Urged to Overcome Digital Divide in OECD-APEC

Singapore -- "Strengthening the partnership between the government and private sector to maximize digital economy access" will be a key message the Executive Director of the APEC Secretariat will deliver the OECD-APEC Global Forum on the Knowledge Economy in Honolulu on January 15. Ambassador Piamsak Milintachinda said access to the knowledge-based economy is a fundamental necessity for growth in all APEC and OECD economies. "Every APEC and OECD economy, regardless of its level of economic development, is home to people who have the potential to be leaders in the digital economy if only they were given the opportunity," said Ambassador Piamsak. "Technology of today such as the Internet means that young people in every corner of the earth should be able to access education and training in ways that were not possible in the past. "Collectively the government and the private sector can work together to broaden access to the digital economy. "Working together, Governments and the private sector from APEC and the OECD already undertake projects designed to increase access to the digital economy. There is always room to strengthen this government and private sector cooperation. "The private sector has a role to play alongside governments in investing in human capacity and raising skill levels. "Current priorities for APEC governments include fostering more dynamic market conditions that will encourage business to invest and trade in areas that have limited access to the digital economy. "The key tool for APEC to open up the digital economy is the reform and liberalization of trade and investment policies in APEC economies. "The leaders of APEC economies have also made a commitment in the ‘APEC Digital Divide Blueprint for Action’ to triple the number of people in the region with direct internet access by 2005. "By 2010 the APEC goal is that all people in the APEC region will have at least community-based access to the Internet. "This forum will provide the opportunity for me to outline APEC's digital economy related programs to the OECD and other interested parties. Ambassador Piamsak said that as governments reduce barriers to trade and investment there is an increasing responsibility on the private sector to invest in human capacity building. "Reducing barriers to trade and investment creates opportunities for business to introduce and develop the skills required for developing areas to participate in the digital economy. "Ultimately private sector investment in training and skills development will not only create jobs, but will provide business with a local pool of skilled workers to draw from." Ambassador Piamsak said promoting the knowledge-based economy is one of the central themes of the 2003 APEC year hosted by Thailand. "The APEC theme for 2003 is: ‘A World of Differences: Partnership for the Future.’ "The people of all APEC-OECD economies have great entrepreneurial capacity that comes from our diverse cultures and histories. "We must work together to ensure that we share the best of our skills, knowledge and talent to build a stronger global economy that will benefit all people. "Increased trade, more jobs and higher living standards are the end result of people in all APEC economies bringing their natural skills to the global market place. "By sharing and developing our strengths we all benefit." Ambassador Piamsak will arrive in Honolulu on January 13 at 9:20AM (Hawaii Local Time) on Japan Airlines Flight 74.

From http://www.apecsec.org.sg/ 01/13/2003

Closer Working Relationship to Be Established Between OECD and APEC Executives

Honolulu, Hawaii -- Senior executives of the APEC Secretariat and the OECD met this week to strengthen links between the two organisations and identify means to build a closer working relationship. The meeting took place during the OECD-APEC Digital Economy Forum currently taking place in Hawaii. OECD Deputy Secretary General, Mr Herwig Schl?gl, and APEC Executive Director, Ambassador Piamsak Milintachinda, have proposed a number of measures to share economic information and research. "APEC and the OECD have already undertaken a number of joint initiatives," said Ambassador Piamsak Milintachinda. "The success of the recent APEC-OECD cooperation on Regulatory Reform, SMEs and the Digital Economy are examples of us working together in areas where we share similar objectives. "Mr Schl?gl has offered the APEC Secretariat the opportunity to participate in activities organised by the OECD including its Global Fora program and this is most welcome. "For our part, the APEC Secretariat is planning to establish an OECD liaison point within the Secretariat to facilitate the systematic exchange of information between our two organisations. "Much of the economic analysis and reporting published by the OECD is very useful to APEC’s work. I am also confident the OECD will be able to make use of the research on the Asia-Pacific region that is conducted by APEC fora. "Closer links between both organisations will avoid resource wastage and work duplication. "In our meeting Mr Schl?gl said he looked forward to APEC’s participation at the OECD SME Ministerial Meeting to be held in Istanbul in June 2004. "Strengthening SMEs and news growth enterprises is one of the key themes of the 2003 APEC year. We look forward to again participating on projects and programs with the OECD." During Ambassador Piamsak Milintachinda’s attendance at the OECD-APEC Digital Economy Forum he also met United States Federal Trade Commissioners, Orson Swindle and Mozelle Thompson. Commissioner Swindle offered to assist APEC to implement its programs in areas such as cyber security and on-line consumer protection. Commissioner Thompson discussed preparations for the APEC On-line Privacy Workshop to be held in Chiang Rai, Thailand on 14 February.

From http://www.apecsec.org.sg/ 01/16/2003

TOP↑

CHINA: Hong Kong to Hike Taxes, Cut Bureaucracy

HONG KONG (Reuters) - Hong Kong Chief Executive Tung Chee-hwa announced plans Wednesday to hike taxes, cut the size of the civil service and slash the pay of top officials in a bid to wipe out the territory's growing fiscal deficit. In his annual policy speech, Tung said the deficit had reached a ``critical stage'' which threatened to undermine Hong Kong's financial strength if the government did not change the way it taxes and spends. ``Solving the deficit problem is the government's top priority,'' Tung told legislators in his first major address as he begins his second term as leader of this southern Chinese territory of 6.8 million people. Some analysts, however, doubted if the moves would be sufficient to eliminate the budget gap, and said Tung should have focused on stimulating the sickly economy instead. Once one of the most dynamic regions in the world and a favorite spot for investors, Hong Kong is struggling to reinvigorate itself, maintain its position as one of the world's top financial centers and restore battered consumer confidence. But first it has to find its way out of high unemployment, the ballooning deficit and persistently falling prices which are hurting the economy and companies' ability to boost profits. Tung said the government needed to cut public expenditures, raise revenues and boost economic growth, and vowed to balance the budget in five years. ``I believe the strategic position and unique role of Hong Kong will never be replaced,'' the normally mild-mannered leader said, thumping his fist on the lectern. The former shipping magnate said he planned to cut the size of the 178,000-strong civil service by 10 percent by 2006/07 through a hiring freeze, natural attrition and retirements. He said the move would help cut government spending by HK$20 billion (US$2.56 billion) to HK$200 billion in 2006/07.Tung also announced unprecedented pay cuts of 10 percent for himself and 16 of his ministers and closest aides. Tung earns a salary of about US$420,000 a year while his ministers earn about US$500,000 a year, dwarfing the US$380,000 salary of President Bush. The chief executive also warned Hong Kong to brace for higher taxes but gave few details, saying they would be released in the budget in March. ``We...intend to introduce appropriate tax increases and adjust government fees and charges upwards to help eliminate the fiscal deficit,'' he said. Tung said he expects the budget deficit to top HK$70 billion (US$8.97 billion) for the 2002/03 fiscal year ending in March, which would make it one of the biggest in Asia, equivalent to more than 5 percent of gross domestic product. The territory's massive fiscal reserves, which are needed to help back its U.S.-linked currency, are being eroded as the government dips into them to meet the shortfall. SHARING THE PAIN, EXPERTS SKEPTICAL Hong Kong prides itself as having one of the lowest tax rates in the world, which is a key enticement to foreign investors, and some economists worry that hiking or imposing new taxes now will stifle the economy's fragile recovery. Six out of 10 workers in Hong Kong do not pay any taxes at all and experts have been calling for a wider tax base to bring in revenues as the city battles a rising deficit. ``I believe the citizens in Hong Kong are reasonable...the general public in a way is willing to share the burden to resolve the budget deficit problem,'' Financial Secretary Antony Leung said at a news conference. Tung also spoke at length about developing closer ties with mainland China's booming south, which the territory sees as a lifeline as it struggles to climb out of an economic quagmire. But he gave few details except to say the city may enter into a pact with the mainland to develop closer economic ties by June. ``It (Tung's speech) was fairly unambitious,'' said Pieter van der Schaft, associate director of economic research at Barclays Capital.`` It's not as if they are privatizing government services or streamlining the civil service...I can't see the measures he has announced as breaking the deficit,'' he said. Financial markets were little fazed by the speech. Premiums on Hong Kong dollar forwards, which reflect perceived risk to the currency, stayed within a 10 pip range between 145/155. A pip is just one ten thousandth of a dollar. The benchmark Hang Seng Index of leading blue chip shares ended up 0.37 percent but off early highs. Other analysts said tax increases were inevitable, and a modest increase may actually be welcomed by the markets if it helped to resolve the deficit. ``It's expected that there'd have to be some sort of tax increases somewhere along the line and I think one or two percent here or there is not going to kill anyone,'' said Nitin Dialdas, investment analyst at Richmond Asset Management.

From http://www.nytimes.com/ 01/08/2003

Hong Kong's Leader Cuts His Pay in 'Hard Times'

HONG KONG, Jan. 8 Saying he thought that Hong Kong was facing the worst economic situation in decades, the territory's chief executive, Tung Chee-hwa, cut his own salary 10 percent today. He said he was reducing his pay, and that of 16 of his ministers and close aides, to "share the hard times" and help fight a ballooning budget deficit. Speaking in the first annual policy address of his second five-year term, Mr. Tung outlined a plan to raise taxes, reduce government spending and build closer ties with China. "Solving the deficit problem is the government's top priority," Mr. Tung told legislators. "Our economy is facing difficulties unprecedented since World War II." Economists, however, remained unimpressed with Mr. Tung's solutions. "Taking a self-imposed pay cut may be a nice symbol," said Dong Tao, the chief regional economist at Credit Suisse First Boston here. "But Tung didn't announce enough new and real measures to change Hong Kong's tough situation." Consumer prices have fallen for more than four years. Unemployment has reached record levels. The bursting of the property market bubble has left more than 70,000 homeowners with mortgages exceeding the value of their houses. Rising welfare claims and declining tax revenues have increased the territory's budget deficit enough to prompt Standard & Poor's to downgrade the territory's credit rating. To combat the deficit, which is forecast to reach 70 billion Hong Kong dollars (almost $9 billion), or 5 percent of the gross domestic product, this fiscal year, Mr. Tung said he would reduce spending by cutting the number of civil servants as well as his own salary and the pay of 16 other top officials. With an annual salary of about $420,000, Mr. Tung earns more than most world leaders, including President Bush. Mr. Tung warned Hong Kong residents to brace for higher taxes, saying that details would be released with the budget in March. Hong Kong now has some of the world's lowest tax rates, a key attraction for investors. He also announced a series of measures intended to further integrate Hong Kong's economy with that of Guangdong Province, its booming Chinese neighbor. "A city is simply not enough to compete on its own," Mr. Tung said. "To advance its competitive edge, Hong Kong must pool its strengths with other cities in the region." (by Thomas Crampton )

From http://www.nytimes.com/ 01/09/2003

Hu Girds for Political Reform

Quite a number of liberal cadres and academics think the Chinese Communist Party (CCP) General Secretary may be firing the first salvo in incremental political reform. In a speech last December marking the 20th anniversary of the promulgation of the 1982 Constitution, Hu repeated a key clause of the charter: "No organization and individual has special powers to override the constitution and the laws." Whether Hu -- and his Communist Youth League Faction of relatively forward-looking cadres -- is serious about legal reform will become clearer at the First Session of the Tenth National People's Congress (NPC) set for March 5. While generally regarded as a rubber stamp, China's parliament could spearhead the kind of limited, though still significant, political reform that Hu's team may be comfortable with in its first five-year term (2002 to 2007). The party chief's priority will likely be to seek a revision of the constitution so as to promote checks and balance among different governing organs -- and to safeguard a certain level of civil liberties. Partly in response to Hu's emphasis on "administration according to the constitution and the laws," liberal legislators have already begun work on retooling the 1982 charter. And should the defend-the-constitution drive gain steam at the upcoming NPC, a full-scale revision of the document can be accomplished at the plenary legislative session in March 2004. According to renowned law professor and former NPC deputy Jiang Ping, the constitution is "the basis of a country's democratic political system." He says, however, that China's constitution has yet to adequately fulfill functions such as protecting the rights of citizens. Jiang and other experts think the revised version should make it doubly clear -- and embody guarantees -- that the Communist party has to subordinate itself to both the charter and the laws. As Hu pointed out in his December address, "all state units, armed forces as well as different political parties and social organizations must safeguard the dignity of the constitution." According to a retired party cadre, President and former general secretary Jiang Zemin has under the "party is supreme" principle, expanded the CCP's clout at the expense of the government as well as judicial and civil-society organizations. The cadre said Jiang, who had retained the chairmanship of the Central Military Commission, had also elevated the CMC's authority to that of the Politburo Standing Committee. "It is clearly in Hu's own personal interest -- as well as that of the requirements of reform -- to ensure that a particular faction in the CCP cannot not ride roughshod over the constitution and the laws," he said. Beijing's intellectuals hope Hu could attend to civil rights issues such as workers' rights to strike and to organize unions after the controversy of whether the party -- or its armed forces -- is superior to the constitution is sorted out. To promote rule by law, Hu and like-minded cadres must also restore the powers and prerogatives of the NPC, which according to the constitution is the highest authority of the land. The legislature's supervisory powers over the party, government and other branches of the polity have been cast into doubt by the frequency with which the State Council and party headquarters have ignored the NPC when embarking on major policies and projects. A glaring case in point is the scheme to divert water from the Yangtze River to the northern provinces, deemed China's grandest-ever engineering feat. Costing at least 480 billion yuan, the water-diversion works is more than twice as expensive as the controversial Three Gorges dam. When the Three Gorges blueprint was deliberated upon at the 1992 NPC, it won the support of barely 1,767 out of 2,633 legislators despite heavy-handed party and government lobbying. Perhaps mindful of this, the administration of Premier Zhu Rongji has chosen not to refer major projects -- including the Qinghai-Tibet Railway as well as multi-billion yuan pipeline to pump gas from Xinjiang to the coastal regions -- to the Congress. (by Willy Wo-Lap Lam)

From http://asia.cnn.com/ 01/13/2003

China's New Leader Consolidates Power

Li Keqiang, 47, was named chairman of the People's Congress, or provincial legislature, of Henan in central China on Saturday, the People's Daily and other major newspapers reported on Sunday. The newspapers did not identify Li, one of China's youngest provincial leaders, as a Hu ally, but China watchers who follow Hu's political career said the two men's paths crossed during stints at the Communist Youth League. The appointments are a significant step in what analysts say will be a long road to building power. "Hu is slowly showing his strength. He is not that simple. He will slowly consolidate power," said Jin Zhong, a veteran China watcher and publisher of Hong Kong's Open monthly magazine. Hu took over from Jiang Zemin as party chief in a generational leadership change at the 16th party congress in November, the Communists' first orderly succession since 1949. Hu, 60, is to replace Jiang, 76, as state president at the national legislature's annual session in March. But Jiang is expected to remain chief of the military, wielding power from behind the curtain as did his predecessor, Deng Xiaoping. Though still in Jiang's shadow, Hu has tried to make his mark by promoting a string of allies to key posts and by media exposure. In a highly publicized bid to burnish his and the party's image, Hu has taken up the cudgel for China's poor -- one of the few non-controversial areas where he can make a difference without risk of stepping on his predecessors's toes. Li, formerly governor of Henan -- China's most populous province with 95.6 million people -- has been promoted to provincial party boss even though in his previous post he had to take administrative blame for a disco fire in Luoyang city in December 2000 which killed 309 people. Also under Li's watch, thousands of rural residents were infected with HIV, the virus that can cause AIDS, in a blood-selling scandal in the 1990s when government-backed clinics failed to properly clean needles. Toeing party line" Toeing the party line is more important than the fire or the AIDS scandal," Jin said, explaining why Li was still promoted. A bungled accident or disaster on an official's watch can sometimes lead to him being passed over for promotion. Other Hu allies promoted on Saturday included Li Chengyu, 56, no relation to Henan's new party chief, who was elected that province's governor. Ji Yunshi, 57, was re-elected governor of the northern province of Hebei and Ma Qizhi, 59, was re-elected governor of the northwestern, Moslem-majority region of Ningxia. China's legislatures are mere rubber stamps and vote according to the wishes of the party. The Beijing People's Congress was expected to elect Vice Mayor Meng Xuenong, yet another Hu ally, as mayor of the capital on Sunday, Chinese sources have said. Meng is 53. Hu's men are also tipped to take over as mayor of Shanghai and as governor of the booming southern province of Guangdong, bringing to six the number of governors and top city mayors tied closely to Hu. Hu has a network of supporters from his days in the Youth League, from his alma mater Tsinghua University and from former posts as head of the Central Party School and of the western regions of Guizhou, Gansu and Tibet. Hu's men have also gained control of two important central party departments -- publicity, which oversees propaganda and the media, and united front, responsible for wooing "dangwai," literally those outside the party. The appointments follow a string of promotions in late 2002 that made at least five Hu allies provincial party chiefs.

From http://asia.cnn.com/ 01/19/2003

More Chinese in Non-state Economy Participate in Politics

In the two months since China's 16th Communist Party of China (CPC) Congress held in mid November last year, more people in the non-state economy sector have entered the political arena than at any time since the People's Republic of China was founded in 1949. At the Zhejiang Provincial People's Congress and the Provincial Committee of the Chinese People's Political Consultative Conference (CPPCC) that just concluded, Xu Guanju, a known private firm owner with assets totaling 800 million yuan (96.7 million US dollars), was elected vice-chairman of the CPPCC Zhejiang Provincial Committee. Xu, chairman of the Zhejiang Chuanhua Group, is also president of the Zhejiang Federation of Industry and Commerce. Before Xu, Yin Mingshan, chairman of Lifan Industrial Group, was elected to the Chongqing Municipal Committee of the CPPCC in the southwestern metropolis. Yin was the first private sector business person to attain such a eminent post in China since the late 1970s when the country launched its policy of reform and opening up to the outside world. Statistics show more than 120 private firm owners were elected to the local municipal people's congress and the municipal committee of the CPPCC this year in the city of Chongqing. In the newly elected Beijing municipal people's congress and CPPCC Beijing Municipal Committee, the new stratum of private firm owners is catching attention. The non-governmental business owners numbered 15 in the 12th people's congress of Beijing. In the 10th CPPCC Beijing Municipal Committee, 47 members were from the private sector, 17 more than last year. A record number of non-state sector personages were elected to the Party congresses and CPPCC committees. More people from the new stratum are involved in local legislation and political affairs, signifying practical and symbolic trends. "This is a strong signal, epitomizing the strong desire of the new stratum for social respectability and political status is being recognized by the government and embodying the progress of political democratization in China," said Wu. Cai Dingjian, an executive director with the Beijing University Research Institute of the People's Congress and Parliaments, expressed the belief that it was normal for private business owners to receive political appointments since their economic strength had grown dramatically. By the end of 2001, China had a total of 24.33 million registered self-employed people and 2,028,500 private companies with capital amounting to 2.1648 trillion yuan (261.8 billion US dollars). Xu and Yin's appointments have been regarded as a trend of political importance since the 16th CPC National Congress ended in mid-November last year. A small group of private enterprise owners had entered the National People's Congress (NPC) before the 16th Party Congress. Experts predicted that in the National People's Congress and CPPCC to be held this March in Beijing, more private enterprise owners will ascend onto the political stage. Under the guidelines of the 16th CPC National Congress, self-employed people, private firm owners and business people alike have all made their contributions to the development of society through honest, diligent work and operations, making themselves builders of socialism with Chinese characteristics. The 16th Party Congress also decided that all legal income from labor or non-labor should be brought under full protection. This has dispelled the worries of private firm owners who became better off ahead of others and also set the political status of private firm owners in the country, said Wu Zhicheng, a prestigious sociologist. As the country's top legislature, the NPC is the highest institution through which the Chinese people exercise their state power. The CPPCC is China's top advisory body. which comprises delegates from the CPC, various democratic parties, non-governmental organizations, ethnic groups and other social strata. The people's political consultative conferences at all levels are dedicated to political consultation, democratic supervision, participation in and discussion of major political issues. Xu and Yin are also presidents of the provincial federation of industry and commerce, which is cited as a governmental assistant in dealing with issues of the private sector. These posts were also held by business-owners before the founding of new China in 1949, but they usually no longer possessed massive assets when took up their posts. The newly-emerging non-state economic personages showed keen and ardent aspiration in participating in political affairs. Wang Jianhua, a newly-elected deputy to Beijing Municipal People's Congress with more than 200 million yuan (24.18 million US dollars) in fixed assets, said: "I'll conscientiously heed and reflect proposals and voices of the non-state economic stratum so that they would be incorporated into the will of the state." An increasing number of NPC deputies from non-state economic sector and CPPCC committee members showed an amazing, high sense of responsibility with their open minds. Their proposals and motions often far outstripped the fields and spheres of business they were involved and covered almost all aspects of social life.

From http://english.peopledaily.com.cn/ 01/23/2003

JAPAN: Tasks for the Newly Opened Diet

Economic revival is the main theme of the 150-day regular Diet session that opened on Monday. One of the first items to be discussed is a supplementary spending package for fiscal 2002 designed to shore up the sluggish economy. Prime Minister Junichiro Koizumi's policy speech, scheduled for delivery on Jan. 31, is expected to focus on economic measures, including steps to reverse deflation. But diplomatic issues will likely steal the show, depending on how the crises over North Korea and Iraq develop. Pyongyang continues to rattle the nuclear saber in open defiance of international nuclear nonproliferation agreements, while Baghdad is bracing itself for a possible U.S. invasion. If war comes, Japanese support will become a subject of heated debate both inside and outside the Diet. It is also likely that in the heat of economic and diplomatic debates, the perennial issue of political reform will be put on the back burner. However, eradicating political corruption remains a pressing priority. Last week's Supreme Court conviction of former Construction Minister Kishiro Nakamura is a fresh reminder that the Diet has yet to establish stricter standards of political ethics. Economically, by far the most important piece of legislation is the government budget for fiscal 2003. To avoid disruptions in the spending schedule, it is essential that the budget pass before April 1 when the new financial year begins. With public debt reaching crisis proportions -- 140 percent of the gross national product -- problems in budget and tax reform as well as local finance should be discussed in detail. Once the budget is enacted, the focus of attention will shift to other key bills, including those designed to defend the country against direct military attacks and to safeguard personal data held by government offices. These measures, left over from the previous regular session, should be thoroughly debated. With Lower House members concerned about a possible snap election later this year, the going could get rough in the last few months of the session, which will close in late June unless it is extended. Deflation -- a continuous decline in the prices of goods and services -- will dominate economic debates, and not only in the Diet. At his New Year's press conference, Prime Minister Koizumi stressed the need for the government and the Bank of Japan to work together to reverse the trend. And at last week's Liberal Democratic Party convention, he said beating deflation is his highest domestic priority. An antideflation package now in the works features a bill to set up a semipublic body that would support heavily indebted businesses deemed to have reasonable chances of recovery. The "industrial revitalization corporation," now expected to start in May, would buy problem loans from selected creditor banks in an integrated effort for bank and business restructuring. Meanwhile, there is talk of a "March crisis" -- a rush of corporate bankruptcies at the end of fiscal 2002. Difficulties in this critical period can be reduced, however, if preparations for the revitalization process are started early on. For example, debt-laden businesses can be screened beforehand to determine, even if informally, their eligibility for recovery assistance. Those that have passed the preliminary test would be effectively assured of survival. The deflation debate looms as an economic-policy showdown between the Koizumi administration and opposition parties, which blame it for the worsening slump. Given a round of local elections in April, as well as the possibility of a Lower House election later in the year, the mood for confrontation will likely heat up. But the conventional tactics of debate boycott would be self-defeating. The difficulty for Prime Minister Koizumi is that he also faces opposition from within his own party. With a party presidential election set for September, anti-Koizumi members will likely step up their demand for a more expansive economic policy. The prime minister has already dropped his 30 trillion yen cap on bond issue. The test for him is to present a reliable road map for structural reform, including a blueprint for debt reduction. As for diplomatic concerns, the Iraqi and North Korean standoffs call for not only a vigorous debate but also a suprapartisan response. The same goes for the long-pending issue of Japanese nationals kidnapped by North Korea, a major roadblock in Tokyo-Pyongyang talks on normalizing relations. Last year's special autumn session was widely criticized for its poor performance, including absenteeism among the legislators. The current session, it is hoped, will restore the Diet's prestige as the nation's highest deliberative assembly.

From http://www.japantimes.co.jp/ 01/21/2003

Gov't Fails to Disclose 127 Documents Despite Disclosure Law

TOKYO — Officials at 10 government agencies failed to release 127 documents under the information disclosure law within the prescribed 30-day limit, five of the agencies failing to disclose 78 documents within the maximum 60-day limit, the government said Tuesday. The figures, released in response to a query posed by Tomoko Abe, a House of Representatives member of the Social Democratic Party, cover information disclosure cases since the law went into force in April 2001 through mid-November last year. Under the law, government agencies must decide whether or not to disclose the requested information within 30 days, or 60 days at most should they require more time to decide. The law stipulates government agencies must explain why the requested information cannot be disclosed should they decide not to do so, and also stipulates the agencies disclose all the names of documents under their possession. The government acknowledged government agencies acted illegally not disclosing the information requested within the specified time. The law opened the way for the first time for the public to access 27.5 million official documents since Japan's modern bureaucracy was established in the late 19th century.

From http://www.japantoday.com/ 01/22/2003

SOUTH KOREA: Former Secretary General of SPPO Was Designated as a Citizen Ombudsman

On January 2, Seoul Mayor Lee Myung-bak designated Jongbo Kim, former Secretary General of the Supreme Public Prosecutor’s Office (SPPO) of the Republic of Korea as a citizen ombudsman. The Citizen Ombudsman System was introduced for the first time in 1995 so as to secure fairness and transparency in administrative procedures and to enhance public trust in the city government. Citizen ombudsmen independently conduct an investigation when over 200 citizens request to do so in a written civil petition. To date, Citizen Ombudsmen have looked over a total of 70 cases, imposing 7.5 billion won worth of penalty on government officials who have done wrong, punishing 522 public servants involved, and improving systems in question.

From http://english.metro.seoul.kr/ 01/03/2003

North Korea Defends Decision to Re-Start Nuclear Program

BEIJING -- North Korea's top diplomat here blamed the United States today for his country's decision to restart its nuclear program, calling it an act of self-defense in response to American aggression. The diplomat, Ambassador Choe Jin Su, also criticized the Bush administration for recruiting mutual allies, like Russia and China, to pressure Pyongyang, saying the crisis could and should be solved by the United States and North Korea without interference. Mr. Choe said his country was "compelled" to restart its nuclear program and to expel inspectors from the United Nations' International Atomic Energy Agency. He said those decisions were necessary after President Bush included North Korea with Iraq and Iran in an "axis of evil," made threatening statements toward North Korea and halted shipments of much-needed fuel oil. "Under this situation, we took our measures," Mr. Choe said at a news conference here, adding that North Korea's moves were a matter of "national dignity." But none of the North Korean charges were new, and the tone of the briefing was in many ways less belligerent than previous statements, with Mr. Choe repeatedly suggesting that the United States and North Korea should "sit down at the table" in search of a peaceful solution. "The nuclear situation on the Korean Peninsula can be solved easily if the U.S. will assure us of our security," he said, repeating North Korea's call for a nonaggression pact. But he expressed skepticism about recent statements from President Bush that the crisis in North Korea could be resolved diplomatically. "The Bush administration is now talking about dialogue, that they have no intention of attacking the D.P.R.K. -- but who can believe these words?" Mr. Choe said, referring to North Korea's official name, the Democratic People's Republic of Korea. The United States has said that it will not hold talks with North Korea so long as it is developing nuclear weapons. In Seoul, an adviser to South Korea's President-elect Rho Moo-hyu, Ben Q. Limb, reiterated that the incoming South Korean government favored dialogue. "The new government calls for dialogue, and President Bush just mentioned two days ago that North Korea's program could be resolved through diplomacy -- now, can there be diplomacy without dialogue?" Mr. Limb said. "The news conference by the North Korean ambassador is a kind of response in his own way to the meeting between the South Korean and Chinese representatives." But Scott Snyder, the Korea representative of the Asia Foundation, an institute partly financed by the United States government, said the latest North Korean call for talks was "a nonstarter." "Now that there is a clear condition for dialogue, it is easy to call for unconditional dialogue," he said. "Dialogue now requires some action on the part of the North Korea to undo what they have done. "The North Koreans have used their ambassadors to float trial balloons in the past," Mr. Snyder continued, referring to earlier tension over North Korea's nuclear program. "There used to be these kinds of press conferences during the '93-'94 process as a way of shaping meetings. It is very typical of their way of trying to manage the process." In recent weeks, the United States has called on China, South Korea, Japan and Russia to intercede -- a tactic that Mr. Choe heatedly rejected. "The United States is now taking steps to create international pressure on us, but this maneuvering will make the issue more complicated and will not help resolve the issue," Mr. Choe said. "If other countries are concerned about nuclear security on the Korean Peninsula, they should urge the United States to assure us of security and if they can't do that they should be quiet," Ambassador Choe said. Tensions between Washington and Pyongyang intensified in October, when North Korean diplomats admitted to American officials who were visiting that North Korea had maintained a clandestine nuclear weapons program. More recently, North Korea raised the stakes drastically by reopening a nuclear complex in Yongbyon that had been shuttered under a 1994 agreement intended to prevent North Korea from developing nuclear weapons. In exchange for shutting down the complex, North Korea was to be provided 500,000 tons of fuel annually. Those shipments, provided by an international consortium including the United States, South Korea and Japan, were stopped at the urging of the United States after North Korea's admission that it had a clandestine nuclear weapons program. (by Elisabeth Rosenthal)

From http://www.nytimes.com/ 01/03/2003

Roh's New Staff-Appraisal System Perceived as Double-edged Sword

The personnel management system of government officials is expected to undergo some significant changes as President-elect Roh Moo-hyun's transition team looks to improve its job evaluation scheme. The transition team said yesterday that it will promote the introduction of the so-called "multilateral evaluation system" in which an official is graded by superiors, subordinates and colleagues alike. Government officials have so far been graded only by their superiors, and the evaluation has been crucial in determining their promotions or appointments to administrative posts. Sources at the transition committee said if the new evaluation system is introduced, it will affect not only government officials but also officials at state-run companies and institutes. The multilateral evaluation system was first implemented when Roh's Millennium Democratic Party (MDP) selected members of its election management committee last fall. The sources said the takeover team also used the new evaluation system before naming 70 staffers to work at its organization. Analysts said the new evaluation system, if adopted, should guarantee fairer appointments and promotions in the public sector by deflecting outside influences on personal management. But some critics said the new system may have negative side effects, such as causing officials to seek popularity rather than concentrate on improving job performance. Transition team members said the system still has bugs, but that the new government is taking a step in the right direction. (by Shin Yong-bae Staff reporter)

From http://www.koreaherald.co.kr/ 01/04/2003

President-Elect Names Chief of Staff

President-elect Roh Moo-hyun named Rep. Moon Hee-sang, a second-term lawmaker, Cheong Wa Dae chief of staff and Ryu In-tae, a former pro-democracy activist, senior presidential secretary for political affairs, his spokesman said yesterday. The two were first major appointments Roh has made in prepa ration for assuming the presidency Feb. 25. Sources at Roh's transition team said the president-elect will soon complete appointments of other presidential staffers, and appoint a prime minister late this month. They said potential candidates for the prime minister include former Prime Minister Goh Kun; Lee Hong-koo, another former prime minister; and Byun Hyung-yoon, honorary professor at Seoul National University. Roh's transition team said it will receive public recommendations for candidates for the incoming cabinet Jan. 10-25 via various channels including the Internet, fax and mail. It will be the first time in Korean history that a president has asked for advice from the public on cabinet appointments. Roh's aides said he will soon likely appoint his key ally Rep. Kim One-ki, a fifth-term lawmaker, a senior presidential adviser. "We have not yet determined what official title Rep. Kim will be given, but whatever it is, he will continue to serve as a policy adviser for Roh," Lee told reporters. Roh's selection of Moon and Kim, both of whom have relatively friendly relations with politicians from both the ruling and opposition parties, represent his desire to have a good handle on domestic politics, including ties with the Grand National Party, aides and analysts said. "The president-elect intends to endow the new presidential chief of staff with a political role in handling relations with the National Assembly and political parties," said Rep. Lee Nak-yon, Roh's chief spokesman. Roh's aides said previously that the Cheong Wa Dae chief of staff will concentrate on political affairs and policy issues will watched over by a deputy chief of staff, a post Roh will create. Moon indicated that he would seek a radical change to the role and functions of the presidential secretariat at Cheong Wa Dae. "The secretariat's functions should be limited to general affairs, public information, political affairs and policy supervision," Moon said after his appointment was announced. He said having senior presidential secretaries oversee cabinet ministries resulted in the concentration of power at Cheong Wa Dae. Moon, 58, served as a member of the ruling Millennium Democratic Party (MDP)'s Supreme Council and led the party's campaign planning team for the Dec. 19 presidential election. He also served as senior secretary for political affairs for President Kim Dae-jung in 1998. "I will try to arrange regular meetings between the president and heads of rival parties to usher in politics characterized by dialogue and harmony," Moon said. Ryu, a 55-year-old former lawmaker, was a longtime opposition member who was once sentenced to death due to his pro-democracy activities in 1974. He currently heads the MDP's local chapter in Jongno in downtown Seoul. (by Kim Hyung-jin)

From http://www.koreaherald.co.kr/ 01/09/2003

Presidential Office Begins to Transfer Records to Government Archives

The Presidential Secretariat began to transfer presidential records Friday (January 10) to the Government Archives and Records Service. It is the first time since the inception of the government in 1948 that such a massive amount of records have been formally transferred to the archives. The transfer is being made under the law on the management of public records, enacted in 2000 to enhance the transparency of state affairs. As of the end of 2002, the records belonging to the outgoing president, Kim Dae-jung, totaled 158,232 items, outnumbering those accumulated by his predecessors over 50 years by 37,276. Kim's documents include 27 personal notes on state affairs and materials from conference the president chaired. The secretariat hopes the transfer will be helpful for historians and the public in making a correct assessment of the five years of the Kim Dae-jung administration and contribute to the management of state affairs of the incoming government. (by Cheong Wa Dae)

From http://www.korea.net/01/10/2003

Civic Group Proposes Anti-Corruption Agency

A major civic group yesterday announced a package of reform measures it said the government of President-elect Roh Moo-hyun should carry out. In the package compiling 41 reform tasks in six areas, the People's Solidarity for Participatory Democracy called for creating a new agency charged with investigating corruption involving top-ranking officials and politicians. The new agency is essential for a thorough investigation into scandals related to key figures of the outgoing government of President Kim Dae-jung, the civic group said. It also insisted corruption cases dating before 1998, when the opposition Grand National Party (GNP) ran the government, should be reviewed by the agency. "A new investigative agency is necessary to secure political neutrality and leave no place of sanctuary in probing cases of corruption involving politicians and top bureaucrats," said Lee Tae-ho, a senior official at the civic organization. The civic group also asked for political reform bills that allow voters to cast ballots for a party as well as a candidate in parliamentary elections, as well as reforms enhancing the democratic operation of political parties and that ensure the transparency of political funds. In order to accelerate political reform work, the group urged all the parties to stop their political wrangling and take steps aimed at self-reform. The civic group proposed a variety of measures to support the livelihood of working-class families, senior citizens and people living below the poverty line. Among such measures were increasing pension payments, expanding the supply of rental houses and setting a legal ceiling on interest rates of private loans. The reform package also included measures to effect changes in chaebol, family-owned conglomerates, and extend the available punishments for illicit corporate governance. The civic group asked President-elect Roh and his aides to set reform tasks as a priority and make the public aware of them, noting that what gets accomplished during their first several months in office will decide whether their reform drive will succeed or not. The group said it will soon deliver a paper on the reform package to the presidential transition team. The People's Solidarity for Participatory Democracy is one of the civic groups, which put forward their own version of reform suggestions for President-elect Roh. Earlier this week, representatives of the Citizens' Coalition for Economic Justice, another major civil rights group, visited the office of the presidential transition team to present a set of policy proposals and advice for the president-elect. Roh's election has lent civic groups greater political leverage, particularly those that favored Roh over his conservative rival Lee Hoi-chang in the presidential election in December last year. In a meeting with civic group leaders after his election victory, Roh thanked them for helping him win the election. (by Kim Kyung-ho)

From http://www.koreaherald.co.kr/ 01/18/2003

Selection of Cho Hung Bidder May Be Delayed

Chon Chul-hwan, chairman of the private-sector members of the Public Fund Oversight Committee (PFOC), the panel in charge of operating the public fund, said Monday that the committee’s plenary session due on Thursday might not be able to select the preferred bidder for Cho Hung Bank. The consortium bidders submitted bids for Cho Hung in December, and observers commented that the Shinhan Financial Group-led consortium is expected to be the front-runner. The other bidding group is led by Cerberus Partners LP, of the United States. Last Thursday, Minister Jeon Yun-churl of Finance and Economy said that the PFOC session held this Thursday would definitely determine the prime bidder. The minister represents the government sector for the committee. A government official said that most of the PFOC members have been in consensus to choose the Shinhan-led consortium and, as such, are highly likely to select it as the preferred bidder on Thursday. (by Yoon Young-shin)

From http://srch.chosun.com/ 01/20/2003

Goh Kun Named as Future PM by South Korean President-elect

SEOUL -- South Korean President-elect Roh Moo-hyun nominated former Seoul mayor as prime minister for his future government. Goh Kun, a veteran in the political arena, was designated by Roh late Wednesday just after the National Assembly approved the bills of the presidential transition committee which enabled Roh to pronounce the nomination, according to chief secretary of Roh Moo-hyun Shin Geh-ryoon. The presidential transition committee will submit the nomination the parliament as soon as possible. And the confirmation hearing is to be held early February. The parliament will vote on the designation after Roh Moo-hyun takes the oath of office on Feb. 25. Goh, 65, has served as ministerial level official in different governments led by different presidents. He was also the prime minister under the leadership of former President Kim Young-sam in1997-1998, and stepped down from the mayor's office of Seoul last June.

From http://news.xinhuanet.com/ 01/22/2003

The Two Koreas Open Cabinet-Level Talks

SEOUL, South Korea - North and South Korea began their first cabinet-level meetings here today since the start of a crisis last fall over the North's nuclear weapons programs. The chief northern delegate, Kim Ryong Song, a senior cabinet minister, struck an upbeat note about the talks, which are scheduled to last four days, saying, "Let's hold our hands together and move forward." Mr. Kim's arrival nearly coincided with that of John R. Bolton, the American under secretary of state for arms control and international security, who flew here from China, where he had discussed presenting the issue of North Korean nuclear proliferation to the United Nations Security Council. But potentially the most important meeting on the crisis, several regional experts said, took place on Monday in the North Korean capital, Pyongyang. There, a special Russian envoy, Deputy Foreign Minister Aleksandr Losyukov, presented a three-part resolution plan to the North's leader, Kim Jong Il. The plan would involve guarantees of a nuclear-free Korean Peninsula, written security guarantees for North Korea from the United States, and a package of relief and economic aid for the impoverished Communist state. In Beijing, where he went after the talks, Mr. Losyukov said he had sensed "some optimism the problems can be resolved." The Russian diplomacy followed an Australian delegation's effort to press North Korea on the need to abandon its nuclear weapons program. The Australian foreign minister, Alexander Downer, told Australia's Nine Network after the delegation's visit: "I'm a little more confident than I was a few days ago because of the messages the delegation has brought back with them. They had pretty constructive talks." North Korea experts cite what they call two sure signs that the country is contemplating a diplomatic solution: the abrupt softening in official statements in the last week, and the rare access given to Mr. Losyukov. He met for six hours with both Chairman Kim and Vice Marshal Cho Myong Rok, who was North Korea's special envoy to the White House during the Clinton administration. It was equally unusual, those experts said, that North Korea broadcast news of the Russian envoy's visit the same day, rather than delaying a day or two. The crisis began in October with the American disclosure that North Korea was secretly developing a nuclear weapons program, in violation of a number of international agreements. The situation has been in a downward spiral ever since, with Washington engineering the punitive suspension of fuel shipments to the country, which had been provided under a previous nuclear arms control agreement, and North Korea retaliating by expelling nuclear monitors and withdrawing from the Nuclear Nonproliferation Treaty. For weeks, North Korea has insisted that bilateral discussions with the United States to guarantee its security are the only way out of the deadlock. This weekend it repeated those calls, urging "knee to knee" talks with the United States. Washington, on the other hand, has said it will not negotiate with Pyongyang, and has cast the problem as a confrontation between North Korea and the international community. "The U.S. has defined this as an international crisis, and for that reason has ruled out a bilateral dialogue," said Scott Snyder, the Korea representative of the Asia Foundation, a regional research organization. "But at the same time, all of the parties recognize that unless the United States is involved in the diplomatic process, there probably won't be a solution. The Russian visit will be very useful for informing the North of how united the international community is on this issue. For the time being, though, I don't expect a breakthrough." The talks here between South and North Korea, meanwhile, will be watched closely for indications of whether the North is willing to modify its behavior in return for South Korean economic and diplomatic support, or whether it simply seeks to drive a wedge between Washington and Seoul. South Korea's president-elect, Roh Moo Hyun, has been an outspoken advocate of dialogue and engagement with North Korea, to the point of irritating Washington, diplomats say. In a live television interview over the weekend, for example, he said that he worried about war plans being entertained by senior American officials. President Bush and members of his cabinet have gone out of their way recently to say there are no plans to attack North Korea. Washington is engaging in intensive consultations with the incoming administration here; with the looming possibility of war with Iraq, the United States is pursuing dialogue to resolve the North Korean crisis. In the past, South Korea has rarely pushed security issues in its discussions with the North, and the United States is eager to see it do so. Asked about the nuclear crisis, South Korea's unification minister, Jeong Se Hyun, who is leading the talks with the North, seemed to play down the issue. "The nuclear concerns are just one aspect of the talks," he said. "We have a lot to discuss." (by Howard W. French)

From http://www.nytimes.com/ 01/22/2003

Public Servants May Get Labor Union

The presidential transitional committee is considering allowing public servants to form a labor union beginning July. This move _ if realized _ is likely to bring significant changes to the public service community. It may be inevitable for the incoming government to make this move, as Roh already promised to grant union rights to public officials during his election campaign. In addition, the International Labor Organization recommended South Korea, a member of Paris-based Organization for Economic Cooperation and Development, guarantee union rights to public officials. The tripartite committee composed of government, labor and management, also reached the consensus that the formation of a labor union for public officials is inevitable. The government has already submitted a bill on public servants which would allow them, among other things, to use the title ``union of public servants’’ instead of ``labor union of public servants.’’ Against this backdrop, public servants formed two organizations, labor unions by nature, and effectively began their labor activities. The proposed bill, if passed the National Assembly, would protect mid and low-level public servants under labor relation law. Public officials will also be entitled to use the phrase of labor union, which in turn would make it possible for them to join major labor organizations such as the Korean Confederation of Trade Unions (KCTU). Public servants may be granted the right to form trade union, but given the status of public officials, they would still be barred from taking collective action. Moreover, while they would be granted the right of collective bargaining, this would not be legally binding on such issues as budget and ordinances. (by Kim Kwang-tae Staff Reporter)

From http://times.hankooki.com/ 01/24/2003

TOP↑

INDONESIA: Govt Mulls Another Task Force for Businesses

The government plans to set up another task force to help seek ways to resolve the lingering problems hurting the investment climate at home and eroding the competitiveness of exporters. The plan was proposed by Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti during a meeting between economic ministers and some 80 business associations on Monday. Dorodjatun himself will lead the new team, with some economic ministers and business leaders as members. But businessmen, who came to the meeting to demand concrete action from the government to resolve problems associated with the high cost of doing business here, were skeptical as similar task forces set up before had not produced any concrete results in resolving the lingering problems. "This is just another way to try and calm down businessmen. Forming another committee is not the solution, what we need is concrete action from the government," said businessman Sofjan Wanandi who also chairs the National Economic Recovery Committee (KPEN), a business lobby. He said that forming special teams seemed to be a trend now among government officials to escape immediate responsibility in resolving various problems. But Dorodjatun defended it by claiming that the team would serve as a forum for government officials and businesspeople to discuss and resolve problems encountered in the manufacturing sector and trade areas. He expressed confidence that the special task force would be able to resolve the factors causing inordinately high costs such as bribes, corruption and inefficiency. Chairman of the Indonesian Food and Beverage Association (GAPMI) Thomas Dharmawan shared Sofjan's pessimism, saying that the forming of the team was not necessary as the problems faced by businessmen could be directly handled each related ministry. "We have been facing classic problems that could have been solved by the government ages ago if they were committed. From my experience, the government-made teams only waste state money for meetings without any concrete action or results," said Thomas. Thomas said that the government should immediately take action in scrapping all unfavorable policies issued by the central government and provincial administrations that unnecessarily created extra expenses and hurt businesses. Businesses have long complained of the above problems, but the pressure for a change intensified lately after the government simultaneously increased fuel, electricity and telephone prices in a bid to cut down expensive subsidies and comply with International Monetary Fund (IMF) structural adjustment directives. During the past couple of years, investment, both foreign direct investment and domestic investment, have been in tailspin. The country's exports have also been dwindling as local exporters are losing their markets to more competitive countries like China, Thailand, Malaysia and Vietnam. In a bid to help solve the problems, Minister of Industry and Trade Rini M. Soewandi set up a special task force called the crisis center, but most businessmen have not seen concrete results. Critics have previously said that to be fully effective, such a crisis center should be headed directly by President Megawati Soekarnoputri herself or at least by the coordinating minister for the economy, given the good coordination and cooperation on the part of other ministers needed to resolve the various problems faced in manufacturing and trade activities. (by Rendi A. Witular)

From http://www.thejakartapost.com/ 01/14/2003

Reforms Accelerated after Bali Bombing

The World Bank said Thursday that Indonesia's reforms remain on track under President Megawati Sukarnoputri although there were signsof growing protectionism in certain sectors, Dow Jones reported. "Structural reforms in the country have even accelerated after the Bali bombing," the World Bank said in a report released ahead of a meeting ofinternational donors in Bali next week. The international lender added that the economic impact of the terrorist attacks in Bali late last year has been relatively moderate and will likely remain so in the near term. Assuming a decline in visitors of between 15% and 20%, Indonesia's 2003 gross domestic product would grow by 4% this year - 0.7 to one percentage point lower than earlier estimated, the World Bank said.

From http://www.thejakartapost.com/ 01/17/2003

Megawati to Seek Re-Election in 2004

Indonesian President Megawati Sukarnoputri says she would run for re-election in 2004, predicting that tens of millions of Indonesians will support her despite rising criticism of her 19-month tenure in office. Her comments to members of her political party signal the opening shots in her campaign for next year's elections, and showed how seriously she is taking the threats to her presidency. Thousands of rowdy anti-government protesters have hit streets across Indonesia over the past three weeks demonstrating against rises in fuel and utility prices, while several leading politicians have called on Megawati to step down. The speech was the first in which Megawati, who rarely comments on political matters, publicly alluded to her involvement in the upcoming ballot. "Those who want to riot, who want violence, who are trying to provoke the situation, I want to challenge them. Are they brave enough ... to face me directly in the forthcoming elections," she told hundreds of members of her Indonesian Democratic Party of Struggle. Megawati became president after her predecessor Abdurrahman Wahid was impeached for incompetence after 18 months in the job. She accused Indonesia's media of bias in their coverage of the price hikes, which the government partially rolled backed on Monday in an attempt to diffuse the protests, seen the first serious sign of opposition to Megawati's rule. Most political analysts expect Megawati -- the daughter of Indonesia's founding father and first president Sukarno -- to be among the favorites to win the 2004 ballot.

From http://asia.cnn.com/ 01/22/2003

CGI Pledges Loans, Urges Govt to Rev Up Reform

The Consultative Group on Indonesia (CGI) promised to provide the country with a higher than requested loan facility, but urged the government to be serious in implementing reform programs to attract flagging investment. At the end of a two-day meeting on Wednesday, the grouping of 30 bilateral and multilateral donors agreed to provide US$2.7 billion in fresh loans, higher than the government's request of $2.65 billion, to help finance the 2003 state budget deficit. "The investment climate is the most significant obstacle to accelerating (economic) growth from the recent rather modest rates, and thus for reducing poverty and vulnerability," said Jemal-ud-din Kassum, World Bank Vice President for East Asia and the Pacific region and also the chairman of the CGI forum. Improving security, strengthening the justice sector, reducing bureaucracy and red tape, maintaining labor market flexibility, reducing uncertainties caused by regional autonomy and avoiding a severe power crisis, are top on the list of things that the government needs to do. Foreign direct investment approvals fell to $7.2 billion in the first 11 months of last year from $8.4 billion in the same period the previous year. The decline in domestic investments was even steeper. The country's economic growth has been largely driven by domestic consumption since it was hit by the late 1990s economic crisis. But experts have said the resulting growth rates of less than 4 percent were not enough to provide sufficient jobs for some 2.5 million people entering the job market each year. The country must achieve a pre-crisis growth rate of more than 6 percent. This means that investment and exports must become the leading engines of growth. Higher economic growth is crucial to helping reduce the number of poor people in the country, which last year stood at around 16 percent of the total population of more than 210 million. The country's traditional foreign donors also demanded that the government redouble its reform efforts in other areas, including the judicial system, and curb illegal logging. "They noted that the continuing weakness of the legal and judicial system undermined efforts to deal with systemic corruption, to encourage investment, to deal with illegal logging and to ensure the basic rights of Indonesians," the World Bank said in a statement. The donors asked the government to work hard in these areas, as hard as it had worked in dealing with terrorism. The CGI praised the government's response to the Oct. 12 terrorist bombing incidents in Bali that killed some 190 people, mostly foreign tourists. The pledged sum is the lowest since the 1998 economic crisis. "This is good news as it means that Indonesia's need for foreign budget financing is diminishing," Kassum said. There has been strong pressure on the government to lessen the country's dependency on foreign loans. The CGI loans comprise $1.1 billion in program and project loans, and grants worth $1.6 billion. Japan, the World Bank and the Asian Development Bank (ADB) accounted for most of the pledges. On top of this, donors will also provide $400 million in technical assistance, grants to the regions and grants to non-governmental organizations. Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti said that the CGI loans would be used to help finance this year's budget deficit, which is projected at around 1.8 percent of gross domestic product. The remaining financing needs would come from the sale of assets controlled by the Indonesian Bank Restructuring Agency (IBRA), and privatization proceeds. Elsewhere, Dorodjatun said that the next CGI meeting was expected to take place in early November. Meanwhile, the CGI loan pledge failed to benefit the rupiah. The local unit ended flat at Rp 8,885 per U.S. dollar on Wednesday. In fact, the central bank had to intervene in the market to defend the local unit, dealers said. (by Dadan Wijaksana)

From http://www.thejakartapost.com/ 01/23/2003

MALAYSIA: Budget Expenses, PM Advises States

All state governments have been directed to be careful with their expenditure and plan all projects according to their budgets. Datuk Seri Dr Mahathir Mohamad, who chaired the 89th meeting of Mentris Besar and Chief Ministers at his office here yesterday, told them that their planning and spending must not exceed what had been budgeted under the Eighth Malaysia Plan. “Basically, the Prime Minister is saying that states must plan accordingly and implement projects that have been approved instead of the ones not in the budget. “State governments must spend according to their allocation and not go beyond that unless the Federal Government can help,” said a source. The Prime Minister’s office, in a statement issued at the end of the two-hour meeting, advised state governments to be extra prudent in their spending and keep it according to what they could afford. “State governments have also been advised to focus on development projects that could bring in returns,” it said. All chief ministers and mentris besar except those for Kelantan and Terengganu attended the meeting. Several Cabinet ministers also attended. Other matters discussed included the success of the Government in handling the sluggish world economy. “The livelihood of Malaysians has not been affected at all despite the decline in the global economic situation. “In fact the living standard of the people is clearly improving due to the lower cost of living in Malaysia,” the statement added.

From http://thestar.com.my/ 01/15/2003

PHILIPPINES: Better Gov’t Assured by President

Filipinos can expect a more effective government in delivering public services this year, President Arroyo assured yesterday following her decision to pull out from the May 2004 presidential elections. By abandoning her political plans, the President said she hopes the country can start to unite and focus on priorities, particularly generating more jobs for Filipinos. In her weekly radio address, Ms. Macapagal said her government is committed to pursue its reform agenda to boost the local economy in the remainder of her term now unburdened by politicking. "Because of my decision, I expect that all the reforms and initiatives that my administration will implement will not be tainted by politics," she said. The President urged the nation, including her political rivals to forget hatred and contempt against the government and instead work together in moving the country forward. "In the advent of the New Year, let us all give way to a new chapter in our lives with a new hope...Hopefully, the New Year will usher in love, forgiveness, and understanding for our fellowmen," she said. Arroyo said she decided not to run for president in 2004 to unify the nation, which has been polarized by too much politics. "Endless politicking has hampered our country from attaining progress," she said. "Our unity and cooperation for a peaceful and progressive Philippines is the only prize I seek in return for the sacrifice I declared recently," she said. The President reiterated that her three priorities now are to work on the economy, particularly the problem of unemployment, to seek unity in the country, and to work for clean and honest elections in 2004. Arroyo noted her Cabinet, in a day-long workshop Thursday in Malaca?ang, streamlined its eight-point work program intended to improve the lives of Filipinos. Ms. Macapagal had earlier directed her Cabinet to review their respective department programs and weed out those originally crafted with 2004 in mind. Among the items in the agenda of the Arroyo administration are to promote small and medium enterprises, jumpstart housing, reduce cargo costs from Mindanao to Luzon, build infrastructure to decongest Metro Manila, generate more revenues, make Makati an urban tourist destination, and stimulate investments in agriculture.

From http://www.mb.com.ph/ 01/04/2003

GMA: All-out War Against Corruption

By Ma. Theresa Torres and Jefferson Antiporda, Reporters; Daxim L. Lucas, Senior Reporter and Ferdinand G. Patinio, Correspondent President Macapagal-Arroyo yesterday moved to arm her government in the battle against “the worst enemy of progress and social justice ” — corruption — by taking 12 concrete measures that she called “strategies” to win the war against poverty. At the EDSA 2 anniversary celebration, the President called a “national draft of all good men and women who want to make a difference in their lives and in our country,” hoping to mobilize them “to work with the government to expose those who would rather pay off the tax collector than pay his right taxes.” She announced she has: ? Certified a bill that will allow the Ombudsman to use private lawyers “for free if possible but for a fee if there are no takers” in prosecuting government officials charged with corruption. ? Directed the Budget secretary to provide P35 million for the Ombudsman to recruit 50 lawyers “for its investigation and prosecution work” and to equip him with information technology systems. ? Asked the Ombudsman to “release to the public the statements of assets and liabilities of all public officials, government nominees in private corporations, and anyone else with any kind of government appointment be it remunerative or honorary, including presidential assistants and advisers.” ? Asked the Ombudsman “to carry out a new task: observe government procurements involving large amounts.” ? Directed the Budget secretary “to provide P700 million to the BIR for its information and communications technology department. Unknown to the public, but well known now in the circle of big tax evaders is the fact that the BIR has been able to track down tax evaders through the power of information technology.” ? Doubled “the budget of the Presidential Anti-Graft Commission to create an investigation unit to undertake intensive lifestyle checks on public officials. This unit will become the link between the government’s anti-corruption drive and the citizens devoted to fighting graft.” ? Created “a special anti-smuggling task force to link our law enforcement agencies with the private sector. I expect this group to bring more results to our anti-smuggling campaign.” ? Ordered “a crackdown on the Customs bonded warehouse system, which has become notorious for smuggling. I am ordering the closure of more than 300 Customs bonded warehouses. I am ordering the Bureau of Customs to abolish the bonded trading warehouses system. And while phasing this out, I’ve ordered Customs to ban the entry of finished goods into these warehouses.” She also ordered the “BIR and Customs chiefs to speed up the cases against big fish and spread their net wider, and mobilize resources for this urgent task.” ? Ordered the Internal Revenue chief “to terminate the existing 45,000 letters of authority issued in the past. From now on only the BIR chief can issue such letters and these letters will be issue-specific and in force for not more than 90 days.” ? Certified to Congress the bill “to create the National Authority for Revenue Administration, changing the BIR from a populous and ponderous bureaucracy to a lean and mean corruption-fighting machine.” ? Made available P2.5 billion “to computerize the quick and accurate counting and tabulation of votes” to “ensure the election of the people’s real choices” and “protect the votes of those who run on the strength of their public service rather than on the force of their private wealth.” She said, “High tech boto, ito ang susi sa pagbabago. High tech vote is the key to reform (new politics).” Internal Revenue Commissioner Guillermo Parayno welcomed the President’s order to revoke 45,000 mission orders, saying it “will sharply reduce corruption levels” in his bureau because these “mission orders have been used to harass and extort bribes from taxpayers.” “Mission orders” are formally called “letters of authority” which are the BIR’s equivalent of police search warrants. They authorize tax collectors and examiners to open the books and financial accounts of corporate or individual taxpayers. The letters should be valid for only 120 days, Parayno said. But his investigation has shown that some have been used for over a year. Businessmen are thankful for the revocation of mission orders. Employers’ Confederation of the Philippines President and Philippine Chamber of Commerce and Industry Director Donald G. Dee, said, “Mission orders, because they give blanket authority, have been abused by BIR examiners who have the discretion to approve or reject tax-deductible items like expenditures.” Bankers Association of the Philippines Executive Director Leonilo G. Coronel expressed his fellow bankers’ appreciation for the revocation order. He said it would surely help the government boost its coffers with taxes that are being siphoned off by unscrupulous examiners. Commission on Elections Chairman Benjamin Abalos expressed delight at the allocation of P2.5 billion for the acquisition of automated counting machines. “It is high time the country had these machines. She is really proving that she wants to leave to our people the legacy of clean elections where every vote is properly counted,” he said. Abalos said at least 2,000 counting machines are needed to handle the votes to be cast by more than 30 million voters in next year’s polls. House Deputy Speaker for Visayas Raul Gonzalez (Iloilo) also praised the President for giving the funds to allow the Ombudsman to work more effectively. On the creation of the NARA or National Authority for Tax Administration, Gonzalez said the House already has a pending bill, which is supported by Speaker Jose de Venecia. However, Gonzalez added, the problem is that BIR people themselves are against it. Rep. Salacnib Baterina (Ilocos Sur), who served on the prosecution panel during the impeachment trial of former President Estrada, welcomed the President’s decision to increase the PAGC’s budget because that will give it more power to prosecute corrupt officials. Opposition Rep. Constantino Jaraula (Cagayan de Oro) said the President’s speech shows “she really means her pledge not to run in 2004 and that she is sincere about initiating social and economic reforms.” He said she should continue monitoring the lifestyles of her officials. As expected, the Estrada and Leftwing camps had nothing but criticism for the President’s address. Deposed President Joseph Estrada said the government’s anti-corruption battle is all “lip-service.” Bayan Muna party-list Rep. Satur Ocampo said, “the only significant thing we did was oust a corrupt regime, but after that nothing has changed.” Traffic flow along both stretches of EDSA was stopped by Leftwing anti-administration protesters. Metropolitan Manila Development Authority Metro Base reported that some 200 to 250 rallyists in jeepneys blocked the northbound Ortigas flyover, diverting motorists to the San Juan-bound fly over. A shoving match ensued at EDSA near Camp Crame as the police prevented the demonstrators from going past the barricades around the EDSA Shrine. Fire trucks had to hose down the demonstrators. Both sides reported minor injuries. Bus and MRT commuters had to suffer long walks as a result of the disturbance.

From http://www.manilatimes.net/ 01/21/2003

THAILAND: Rights, Rehabilitation Key to Reform Process

Reform in the justice system, which began in October, is progressing slowly, though most agree change was overdue. Kittipong Kittiyarak, head of the Probation Department, said the justice system was no longer simply about processing cases and sending guilty people to jail. ``Officials had created their own power domains, and too much power was concentrated in the centre. Policies were in a muddle, and no one was keeping an eye on what was going on,'' said Mr Kittipong, who is a member of the panel which revamped the system. The old judicial system simply forwarded cases from one agency to another. It was all deterrence and no rehabilitation. Quickly, the country's jails became overstretched. Officially they can accommodate 102,627 inmates but now hold more than double that number, 252,370. ``People feel the judicial process is unreliable and they need help from influential figures. This is a dangerous sign. If we let them feel like this, social problems will intensify,'' Mr Kittipong said. The Corrections Department, which oversees jails, has has to keep an eye on prisoners but had done little to make sure they stayed out of trouble once they left jail. ``Without help, they could end up back behind bars, in a vicious cycle,'' said former attorney-general and charter writer Kanit Na Nakhon. Under the changes, the courts and other agents of the justice system were split from the Justice Ministry. The new stress is on public participation and protecting victims' rights and suspects' rights. Before, the ministry comprised only four agencies _ the secretariat, the permanent secretary's office, Promotion Department and Legal Execution Department. Now it has 14 agencies: the minister's office, the permanent secretary's office, the Probation Department, the Rights and Freedom Protection Department, the Legal Execution Department, the Juvenile Observation and Protection Department, the Corrections Department, the Special Investigation Department, the Forensic Science Institute, the Judicial Affairs' Office, the Narcotics Control Board's Office, the Anti-Money Laundering Office, the Office of Attorney-General. Under the structure, the Judicial Affairs Office acts as a secretariat to the National Judicial Commission chaired by the prime minister. The office works with courts, police and professional organisations such as the Law Society of Thailand to write policies, correct flaws in the system, and study how to amend laws. Mr Kittipong said the new Rights and Freedom Protection Department gave people easier access to justice services. The department accepts complaints about injustice and invites public participation in the judicial process under the concept of restorative justice. ``In the past, there was no mechanism for communities to solve internal problems. Arrest and detention is not always the best way,'' he said. Now, community panels mediate disputes, handle probation work, offer rehabilitation for wrongdoers and set up community warning systems. State agencies advise on rehabilitation programmes for drug users and people convicted of family violence. ``The changes have taken seven million drug addicts out of jails and offered them rehabilitation under community care,'' Mr Kittipong said. Another task under the reform plan is to boost the efficiency of investigations, amid complaints that police had trampled on suspects' rights. The Special Investigation Department can revise cases where irregularities are suspected, while the Forensic Science Institute can double-check evidence. Mr Kittipong and Mr Kanit said improvements in the justice system depended on public expectations. ``The current political situation makes it difficult for us to hope that everyone will be treated equally under the law. However, I think we are on the right track.'' Mr Kittipong said police work most closely with the public but are notorious for being corrupt. He was relieved that a plan to transfer the police force to the ministry was ultimately scrapped. ``The Justice Ministry should focus on law enforcement rather than suppression. The ministry and police have different cultures. More importantly, uncertainty lingers about whether police can adjust their behaviour,'' he said. Power in the police force should be devolved to local communities, he said.

From www.bangkokpost.com 01/04/2003

Ministers Likely to Be Cleared

At least six of nine ministers named by the opposition for impeachment are likely to be cleared. A source at the National Counter Corruption Commission said inquiries were foundering for lack of evidence and state officials' reluctance to implicate ministers. The NCCC set up sub-panels to look into claims against nine ministers. Inquiries against six Deputy Prime Minister Chavalit Yongchaiyudh, Finance Minister Somkid Jatusripitak, Deputy Finance Minister Suchart Jaovisidha, Environment Minister Praphat Panyachartrak, former deputy defence minister Gen Yuthasak Sasiprapa and former deputy prime minister Pitak Intrawithayanunt are close to being wrapped up. Results of inquiries into the other three ministers Deputy Prime Minister Suvit Khunkitti, Interior Minister Wan Muhamad Nor Matha and Industry Minister Somsak Thepsuthin would be released later. The NCCC took up the impeachment probe at the opposition's request, following last year's censure debate. The opposition accused the ministers of abuse of authority and corruption. The source said the NCCC would hold a special meeting tomorrow to look at the findings. The sub-panel dealing with Mr. Somkid found no evidence to back claims that the finance minister turned a blind eye to an allegedly dodgy transfer of Shinawatra Corporation shares to Banpot Damapong, from Khunying Pojamarn Shinawatra and Prime Minister Thaksin Shinawatra. The opposition said Mr. Somkid should take responsibility for the Revenue Department's failure to levy tax on the 738-million-baht share transfer. Turning to Mr. Suchart, the sub-panel headed by Kamol Prachuabmoh found no proof that the deputy minister helped CS Communication and Shin Satellite, both companies under Shin Corp, to evade taxes on imports of satellite equipment. The Customs Department, however, has asked the NCCC to widen the inquiry as it suspected some of its officials may have been involved. The source said Mr. Pitak and Mr. Praphat, formerly the deputy agriculture minister, were also likely to be cleared. The sub-panel overseeing their inquiry is chaired by Virat Wattanasiritham. No evidence was found that Mr. Pitak misused his position to demand that title deeds be issued over national park land in Thalang district, Phuket. The Phuket governor, provincial land officials, and the Land Department chief told the NCCC that they formalised the deeds without Mr. Pitak telling them to do so. The Council of State, the government's legal arm, argued that no deeds could be issued over park land, but the Land Department disagreed. No evidence was found that Mr. Praphat falsely declared his assets to the state, and encroached on forest reserve in Chae Hom district, Lampang. The tracts Mr. Praphat was alleged to have taken may be occupied under a special Forestry Department permit. Likewise, no evidence was found that Gen Chavalit and Gen Yutthasak pocketed gains from work on 19 helicopters worth 1.1 billion baht.Korbsak Sabhavasu, a Democrat MP, said the likelihood of the ministers walking free made a nonsense of accountability tools such as censure debates and impeachment proceedings. (by Pradit Ruangdit)

From www.bangkokpost.com 01/14/2003

Govt in Fear of Scrutiny, Says Jurin

The Democrats say a government move to cut the number of House committees from 31 to 24 is aimed at blocking scrutiny of the executive branch, not cutting parliamentary costs as claimed. Jurin Laksanavisit, opposition chief whip and party executive member, said the government was simply trying to block investigations into its performance. The opposition had earlier warned the government against increasing the number of House commiittees from 23 to 31, but it went ahead and did it anyway as it wanted to create more positions for coalition MPs, Mr Jurin said. It later found that the extra committees had not worked to its best interests. Several panels have helped dig up irregularities in government projects. The government now wanted to block this unwelcome scrutiny by slashing the number of the panels, particularly those headed by opposition members. ``Budget funding is not the issue... the government's planned reductions are for its own survival. We strongly disagree with this move,'' the opposition chief whip said. As the government controlled most of the votes in parliament, the proposal was likely to win approval. Juti Krairiksh, Democrat deputy spokesman and chairman of the House panel on economic development, said the government had provided unsound reasons in defending its planned cutback. In the face of heavy grilling by some panels, the government opted to get rid of graft investigators so no more news about corruption could be leaked, he said. He suggested the government slash the budget allocated for public relations to 700 million baht from 1.4 billion a year rather than cutting the number of House committees. The government could also be thinking of altering some concession contracts in favour of some of its members. To block the investigation into the planned contract changes, it wanted to cut the number of the panels, he said. (by Pradit Raungdit)

From www.bangkoopost.com 01/15/2003

VIET NAM: President Luong Urges Faster Judicial Reform

President Tran Duc Luong has told the Ministry of Justice to speedily eliminate hurdles that are obstructing the quick disposal of civil suits and tarnishing the prestige of the judiciary in the process. Speaking at the ministry’s review meeting on Tuesday, the State leader lamented: "There are many civil cases piled up. And more than a few of them have been lying untouched for decades now." He urged the ministry to improve its organisation and workforce in terms of capability and morality as people’s patience could soon run out. His demand was unambiguous: "This is a matter of legitimate benefit for our people, the prestige of the judiciary and faith of people in the State. So we need to resolve this problem for good this year." He said the Party and State would strongly back the ministry’s efforts through policy changes if necessary. Luong asked the ministry to complete the draft on verdict execution. The president also sought a significant increase in both quantity and proficiency of Vietnamese lawyers to improve the quality of advocacy. He said the ministry should help the Government perfect the legal framework and create optimum conditions for lawyers besides offering them professional training. "An urgent task now is to issue two separate amended laws on criminal and civil procedures, which will give lawyers greater access to evidence and increase their role in the procedural process." "In the long run, this process must be renovated in the direction of stronger democratisation, easy access, greater transparency, equality and improved public supervision." He emphasised fairness and "in case of wrong verdicts, the affected should be compensated – including the restoration of their reputation – while those responsible for the wrong verdict should be punished." He urged the judicial sector to educate people about international laws affecting Viet Nam, admitting not many had knowledge of these due to lack of information. The ministry revealed its agenda for the year, key among which are improving its capability to build judicial institutions and expediting civil cases. Other major tasks include upgrading the efficiency of supporting agencies, strengthening judicial organisation, and sharpening investigative work. Its most significant job last year was the construction of institutions, which have contributed considerably to the NA’s law-making programme. However, it admitted to many shortcomings still, especially in law enforcement, adding that a lack of co-ordination between various agencies put the brakes on it. Another worrying development was that the number of law enforcers committing wrongdoings has tended to grow; last year, 83 people faced censure for such acts.

From http://vietnamnews.vnagency.com.vn/ 01/08/2003

Restructuring Is Key to Growth

Prime Minister Phan Van Khai has said the country’s economic restructuring process needs a breakthrough to fulfil this year’s 7.5 per cent growth target. He told provincial and municipal leaders at the closing session of their meeting with the Government over the past two days in Ha Noi that they should see to it that the restructuring process is strictly applied in all areas and goes hand-in-hand with economic efficiency. The prime minister’s call for quicker restructuring came after the leaders held group discussions to brainstorm specific measures to guarantee they would meet their annual goals. Khai expressed his hopes that this year would witness all-out efforts by the people to get behind the current restructuring process. He added that the results of the process have so far been very modest, and that there are many things that remained to be done to help people to escape poverty and strengthen the restructuring process. The prime minister reminded the participants of the special importance of restructuring the agricultural and rural economies. He told the provincial and municipal leaders that their constituencies must be encouraged to take part in the restructuring process and that a movement should be launched to make people "in each village and each family" aware of the need to reform their traditional farming practices. The prime minister urged the local administrations, ministries and government agencies to co-ordinate more closely on their comprehensive development plans and learn from each others’ efforts. He added that while carrying out their restructuring plans, provincial and municipal leaders must not overlook social problems that would destabilise the country. This year should be the year when greater efforts are made to bring down rates of drug addiction, crime and traffic accidents, he said. Local authorities should co-ordinate with various ministries to further reduce the number of people living in poverty, he said. He urged provincial and municipal authorities and business leaders to start following their 2003 plans through now to avoid the customary tendency of sluggishness in the first half of the year and haste in the second half. He said the achievements of the last few years have been enormous, but Viet Nam had always met with difficulties in the first half of the year.

From http://vietnamnews.vnagency.com.vn/ 01/09/2003

Vietnam to Set Up National Devt Bank in 1st Half '03

Vietnam's Ministry of Finance, or MOF, is planning to set up a new State-owned bank - the National Development Bank - in the first half of this year, instead of an export-import bank (Eximbank) as it said previously, a ministry official said Monday. The MOF hopes it can submit its plan for establishing the future NDB to the Government in the first quarter of this year, the official said. "We need to establish the new bank which will be capable of creating sufficient support for the country's development investment efforts, including boosting imports and exports," he said, noting that "(establishing) an Eximbank isn't enough for the task." According to the MOF's plan, the NDB will be set up by merging the two existing State-run funds - the Development Assistance Fund, or DAF, and the Export Assistance Fund, or EAF. "We haven't finalized details like operational capital of the new bank," he was quoted as saying. According to the Ministry of Planning & Investment on Monday, the future NDB will have a registered capital of 10 trillion dong ($1=VND15,385), doubling the size of the DAF which has a registered capital of VND5 trillion. The MOF official said the future NDB will focus on assisting Vietnamese producers and exporters, and acting as a guarantor for traders. Vietnam recorded $16.5 billion of exports last year and aims for an 8 percent growth this year.

From http://www.bvom.com/ 01/23/2003

BANGLADESH: Reform Police Admn, Set Up Independent Anti-Corruption Commission

An exceptionally high level of pervasive and endemic corruption eats up national wealth and frustrates Bangladesh's ventures for sustained economic growth to help people out of poverty trap, development researchers said at a donor-sponsored seminar yesterday. World Bank country director Frederick T Temple told the function that creation of an independent Anti-corruption Commission is a must for dealing with institutional corruption. Unless the anti-corruption organization is made independent, it will continue to be a "tool of partisan politics -- with each new government dropping ongoing cases against its own party members and launching new cases against members of the past government". Speakers at the meet observed that the police is just a part of a wide network of corruption, and blaming the police alone will not solve the problem unless police administration is reformed and independent anti-corruption commission is formed. Although GDP maintained a steady growth over the decades and foreign aid dependence reduced, income growth declined and overall incidence of poverty still remained very high, they said. "GDP growth might take place... At the same time national wealth might be wasted due to corruption and misallocation of resources," Dhaka University teacher Prof. Muzaffer Ahmad told the workshop on "Corruption and Transparency." News Network, a news feature agency, organized the workshop at CIRDAP auditorium. World Bank Dhaka Office sponsored the meet. Prof. Ahmed identified misuse of power as the root cause of corruption in Bangladesh and felt that corruption can never be arrested unless such abuses were stopped right from the highest level. Prof. Ahmed viewed that the recent ordinance indemnifying all army acts during the anticrime operation, avoiding trial, would rather encourage misuse of power from upper levels down to the bottom. Communications Minister Barrister Nazmul Huda, who inaugurated the workshop, however, defended as an imperative the ordinance issued on January 9. "What else the government could do?" Increasing incidence of murder and violence necessitates deployment of army and the step helped tackle the situation, he said, admitting that "some losses" might have taken place in greater public interest. Keynote speaker and executive director of Transparency International Bangladesh Manzoor Hasan said lack of institutional reform, severe confrontational politics, "criminalisation" of politics, deterioration of law and order and fatal haemorrhage due to exceptionally high levels of pervasive and endemic corruption hindered sustainable economic growth in Bangladesh in '80s and '90s. These factors, he said, have given rise to fiscal deficit and pressure on foreign currency reserve, a drop in investment, a very high level of dissatisfaction of citizens in terms of service-delivery institutions, dysfunctional watchdog agencies and deterioration of financial institutions. "So it seems that Bangladesh, despite its high potential and a reasonable track record, has come up against a mis-governance-brick-wall," Manzoor said. He felt the magnitude of loss would keep increasing unless the "brick-wall" is dismantled. The TIB executive referred to diagnostic studies that revealed how unusual delay in granting permission from Prime Minister's Office (PMO) handicaps the Bureau of Anti-corruption (BAC) in dealing with administrative and political corruption cases. "The PMO has a maximum six-month time-limit to grant such permission, but obtaining such permission took four to nine years to carry out investigations of certain cases," he said, quoting a TIB survey. Up to March 2001, the duration of cases filed with BAC and awaiting approval from the PMO ran between 1 and 6 years, he pointed out. World Bank country chief Temple reminded the ruling BNP of its election manifesto that promised an independent commission, and hoped the government would act on its commitment. Among other things, Temple suggested speedy reforms in the police and judiciary, including separation of the judiciary from the executive. While it is easy to blame the police, one should also remember that they are overworked, underpaid, vulnerable to reprisals from criminals, and enmeshed in a network of corruption of which they are just a part, the World Bank executive noted. The donor agency's country chief observed that lack of punishment helps corruption flourish