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JFP News 9/15: US Cancels Visas of Honduras Coup Leaders
Submitted by Robert Naiman on 15 September 2009 - 5:17pm
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September 15, 2009
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1) The de facto ruler of Honduras said Washington had pulled his U.S. visas as punishment for failing to reinstate President Zelaya, the Los Angeles Times reports. Roberto Micheletti said the visas of his foreign minister, Carlos Lopez, and 14 Supreme Court justices were also revoked. Revoking visas, which Hondurans must have to travel to the U.S., has an especially sharp sting for the country's elite, which cherishes shopping and business trips to U.S. cities, the LAT says.
2) Canadian Prime Minister Harper's office said Canada will not extend its mission in Afghanistan, AP reports. A spokesman reiterated that Canada will withdraw its troops in 2011. Canada has 2,500 troops in Afghanistan.
3) Human rights advocates and local residents say the U.S.-backed Pakistani military is responsible for a wave of extrajudicial killings in Swat, the New York Times reports. Concerns over the army's methods in Swat threaten to further taint Washington's association with the military, the NYT says. Reports in two national newspapers said the bodies of 251 people had been found dumped in Swat. The Pakistani Human Rights Commission said there were credible reports of retaliatory killings by the military. The exact number of alleged killings was impossible to calculate because the presence of human rights monitors was limited by the authorities, the commission said.
4) EU officials announced an Oct. 1 date for new talks with Iran and the U.S., the Washington Post reports.
5) The IAEA has refused to acknowledge evidence that documents purportedly showing a covert Iranian nuclear weapons program from 2001 to 2003 were forged, Gareth Porter reports for Inter Press Service. None of the supposedly top secret military documents had any security markings of any kind; purported letters from defense ministry officials lacked Iranian government seals. Porter notes that similar concerns led the IAEA to conclude that the Niger uranium documents used to justify the invasion of Iraq were fake.
6) General McChrystal told reporters he does "not see indications of a large al-Qaida presence in Afghanistan now," AP reports.
7) House defense spending cardinal John Murtha has made his strongest comments yet opposing more U.S. troops for the war in Afghanistan, Foreign Policy reports. "In Vietnam it took 500,000 troops and that didn't solve the problem. So we have to take a different approach," Murtha said.
8) 90 percent of those deciding to join the Afghan army are illiterate, AP reports. That's higher than the 75 percent national illiteracy rate, because military recruits come from lower classes where few know how to read. That means soldiers cannot use maps properly. Most Taliban guerrillas also can't read and write, but they don't need to as much. They move among friendly, generally ethnic Pashtun communities and rely on local guides. Many Taliban fighters operate in areas of the country where they grew up, making maps and compasses unnecessary. Pulau Electronics has been hired to run a program that aims to make 50 percent of Afghan troops "functionally literate," within the first year of the program. "The target is for them to be able to write their name and their weapon's serial number," said a Pulau employee.
9) What would be electoral fraud elsewhere isn't necessarily fraud in Afghanistan, AFP reports. Block votes instructed by a tribal leader would not necessarily be fraudulent. AFP cites a case where villagers agreed that elders would vote on behalf of village because of security concerns.
10) Ideological Israeli settlers in the West Bank will certainly resist evacuation but are unlikely to engage in organized armed conflict with the Israeli military, the New York Times reports. Ideological settlers who live deep in the West Bank number about 50,000, the NYT says [a tenth of the settler population and a sixth of the settler population outside "greater Jerusalem" - JFP.]
11) Nobel Prize-winning economist Joseph Stiglitz says Ecuador's economy benefited from Ecuador's 2008 debt default, Reuters reports. Stiglitz praised Ecuador's audit of illegitimate debt and said other countries should consider such a move. "There are benefits and costs, but it is clear that Argentina is better off after its (2002) default than it was before. Russia is better off after its (1998) default," Stiglitz said.
1) U.S. pulls visas of top Honduran officials over coup
Roberto Micheletti, who replaced President Manuel Zelaya after a coup, says his visas and those of a minister and 14 judges have been revoked by the U.S., which is demanding that Zelaya be reinstated.
Tracy Wilkinson, Los Angeles Times, September 13, 2009
Mexico City - The de facto ruler of Honduras said Saturday that Washington had pulled his U.S. visas as punishment for failing to reinstate President Manuel Zelaya, ousted more than two months ago.
Roberto Micheletti, acting as president since the June 28 coup, said on a radio program that the visas of his foreign minister, Carlos Lopez, and 14 Supreme Court justices were also revoked.
There was no immediate comment from Washington, but the Obama administration in late July suspended the visas of four Honduran officials allied with the coup. And this month, the State Department said it would add more officials to the list of people being denied entry to the United States as part of a wider package of measures to pressure the acting Honduran government.
The United States, along with the rest of the Western Hemisphere and Europe, is demanding that Zelaya be reinstated. Washington has yanked $30 million in aid, is threatening to cancel $200 million more and has suggested that it would not recognize the results of the upcoming presidential elections. But Micheletti and his government have steadfastly refused to allow Zelaya to return to the presidency.
Revoking visas, which Hondurans must have to travel to the U.S., has an especially sharp sting for the country's elite, which cherishes shopping and business trips to U.S. cities.
Micheletti said he lost both his diplomatic and tourist visas. "We knew this was coming," he said. He complained that the letter notifying him of the sanction addressed him as head of Congress, his position before the coup, and not as president.
2) Canadian PM says he won't extend Afghan mission
Rob Gillies, The Associated Press, Monday, September 14, 2009 6:49 PM
Toronto - Canada will not extend its mission in Afghanistan even if President Barack Obama asks him to when the countries' leaders meet this week, Prime Minister Stephen Harper's office said Monday.
Harper spokesman Dimitri Soudas reiterated in a briefing Monday that Canada will withdraw its troops in 2011.
One hundred and thirty Canadian soldiers and a diplomat have been killed in Afghanistan, where Canada has 2,500 troops. "Canada's position is clear," Soudas said. "The military component of the mission ends in 2011."
In 2005, Canada assumed responsibility for Kandahar, one of Afghanistan's most dangerous provinces. Last year, Harper said Canada had done its part after serving in the volatile region and announced Canada's troops would be withdrawn in 2011, extending its mission by two years. Although Canada's participation is slated to end in two years, critics are growing increasingly wary of a mission that they see as too dangerous.
3) Pakistan Army Is Said To Be Linked To Many Killings In Swat
Jane Perlez and Pir Zubair Shah, New York Times, September 15, 2009
Mingora, Pakistan - Two months after the Pakistani Army wrested control of the Swat Valley from Taliban militants, a new campaign of fear has taken hold, with scores, perhaps hundreds, of bodies dumped on the streets in what human rights advocates and local residents say is the work of the military.
In some cases, people may simply have been seeking revenge against the ruthless Taliban, in a society that tends to accept tit-for-tat reprisals, local politicians said.
But the scale of the retaliation, the similarities in the way that many of the victims have been tortured and the systematic nature of the deaths and disappearances in areas that the military firmly controls have led local residents, human rights workers and some Pakistani officials to conclude that the military has had a role in the campaign.
The Pakistani Army, which is supported by the United States and in the absence of effective political leadership is running much of Swat with an iron hand, has strenuously denied any involvement in the killings. The army has acknowledged that bodies have turned up, but its spokesmen assert that the killings are the result of civilians settling scores.
But neighbors of the victims and Swat residents say there is something more going on than revenge killings by civilians.
A senior politician from the region and a former interior minister, Aftab Ahmed Sherpao, said he was worried about the army's involvement in the killings. "There have been reports of extrajudicial killings by the military that are of concern," he said. "This will not help bring peace."
Pakistan's military operations against the Taliban in Swat, begun in May under public pressure from the United States, has been hailed by Washington as a showcase effort of the army's newfound resolve to defeat the militants. The American ambassador, Anne W. Patterson, visited Mingora, the biggest town in Swat, last week, becoming the first senior American official to go to Swat since the army took over.
Now, concerns over the army's methods in the area threaten to further taint Washington's association with the military, cooperation that has been questioned in Congress and has been politically unpopular in Pakistan.
The number of killings suggests that the military is seeking to silence any enthusiasm for the Taliban and to settle accounts for heavy army casualties, said a senior provincial official who spoke on the condition of anonymity for fear of reprimand by the army.
A sullen, uncertain atmosphere prevails in Mingora, where people interviewed last week in shops, homes and government institutions nervously complained of the arbitrary and unpredictable army rule.
Bodies, some with torture marks and some with limbs tied and a bullet in the neck or head, have been found on the roads of Mingora and in rural areas that were militant strongholds.
Reports on Sept. 1 in two national daily newspapers, Dawn and The News, said the bodies of 251 people had been found dumped in Swat.
The Human Rights Commission, a nongovernmental organization, disputed that all the victims had been killed by civilians, saying last month that there were credible reports of retaliatory killings by the military. It said that witnesses had seen mass graves and that in some cases, the bodies appeared to be those of militants.
The exact number of alleged killings was impossible to calculate because the presence of human rights monitors was limited by the authorities, the commission said. The International Committee of the Red Cross, which investigates illegal killings, was ordered by the military to leave Swat last month over matters unrelated to the killings, a senior Pakistani government official and the Red Cross said.
4) Iran Agrees To New Talks With 6 Global Powers
Tehran: Nuclear Program Not on Agenda
Joby Warrick, Washington Post, Tuesday, September 15, 2009
Vienna, Sept. 14 - Iran, facing stiffening pressure over its nuclear program, has agreed to a new round of talks with global powers this fall but also repeated Monday its vow to fend off any attacks against its nuclear facilities.
European Union officials announced an Oct. 1 date for the new talks, which will include Iran's top nuclear negotiator and representatives of the United States, Germany, France, Britain, Russia and China. The discussion will be the first between Iran and the six world powers in more than a year.
Iran in recent days has appeared to rule out curbs on its atomic energy program, declaring its pursuit of nuclear power to be an "inalienable right." But U.S. and E.U. officials expressed hope Monday that the new talks could ultimately include Iran's nuclear ambitions.
"This is an important first step," said Steven Chu, the U.S. energy secretary, who was attending a meeting at the Vienna headquarters of the U.N. nuclear watchdog, the International Atomic Energy Agency.
In Tehran, a Foreign Ministry spokesman appeared to dampen expectations. "Talks will focus on disarmament and international concerns, not the Iranian rights enshrined by the Non-Proliferation Treaty," said spokesman Hassan Qashqavi, referring to Iran's claim of a legitimate right to seek peaceful nuclear power.
5) IAEA Conceals Evidence Iran Documents Were Forged
Gareth Porter, Inter Press Service, Sep 14
Washington - The International Atomic Energy Agency says its present objective regarding Iran is to try to determine whether the intelligence documents purportedly showing a covert Iranian nuclear weapons programme from 2001 to 2003 are authentic or not. The problem, according to its reports, is that Iran refuses to help clarify the issue.
But the IAEA has refused to acknowledge publicly significant evidence brought to its attention by Iran that the documents were fabricated, and has made little, if any, effort to test the authenticity of the intelligence documents or to question officials of the governments holding them, IPS has learned.
The agency has strongly suggested in its published reports that the documentation it is supposed to be investigating is credible, because it "appears to have been derived from multiple sources over different periods of time, is detailed in content and appears to be generally consistent".
IAEA Safeguard Department chief Olli Heinonen signaled his de facto acceptance of the "alleged studies" documents when he presented an organisational chart of the purported secret nuclear weapons project based on the documents at a February 2008 "technical briefing" for member states.
Meanwhile, the IAEA has portrayed Iran as failing to respond adequately to the "substance" of the documents, asserting that it has focused only on their "style and format of presentation".
In fact, however, Iran has submitted serious evidence that the documents are fraudulent. Iran's permanent representative to the United Nations in Vienna, Ambassador Ali Asghar Soltanieh, told IPS in an interview he had pointed out to a team of IAEA officials in a meeting on the documents in Tehran in spring 2008 that none of the supposedly top secret military documents had any security markings of any kind, and that purported letters from defence ministry officials lacked Iranian government seals.
Soltanieh recalled that he had made the same point "many times" in meetings of the Board of Governors since then. "No one ever challenged me," said the ambassador.
The IAEA has never publicly acknowledged the problem of lack of security markings or official seals in the documents, omitting mention of the Iranian complaint on that issue from its reports. Its May 26, 2008 report said only that Iran had "stated, inter alia, that the documents were not complete and that their structure varied".
But a senior official of the agency familiar with the Iran investigation, who spoke with IPS on condition that he would not be identified, confirmed that Soltanieh had indeed pointed out the lack of any security classification markings, and that he had been correct in doing so.
The official suggested that the states that had provided the documents might claim that they had taken the markings out before passing them on to the IAEA. It is not clear, however, why an intelligence agency would want to remove from the documents markings that would be important in proving their authenticity.
The IAEA's apparent lack of concern about the absence of security markings and seals on the documents contrasts sharply with the IAEA's investigation of the Niger uranium documents cited by the George W. Bush administration as justification for invading Iraq in 2002-2003.
In the Niger case, the agency concluded that the documents were fabricated based on a comparison of the "form, format, contents and signature" of the documents with other relevant correspondence, according to IAEA Director General Mohamed ElBaradei's Mar. 7, 2003 statement to the U.N. Security Council.
6) McChrystal: No major al-Qaida signs in Afghanistan
Mike Corder, Associated Press, Friday, September 11, 2009 10:48 AM
The Hague, Netherlands - The top commander of U.S. and international forces in Afghanistan said Friday he sees no signs of a major al-Qaida presence in the country, but says the terror group still maintains close links to insurgents.
I do not see indications of a large al-Qaida presence in Afghanistan now," McChrystal told reporters at the Dutch Defense Ministry, where he met military officials.
7) Murtha to Obama: No more troops
The Cable, Foreign Policy, Mon, 09/14/2009 - 11:33am
House defense spending cardinal John Murtha, an early bellwether of congressional opposition to the Iraq war, has made his strongest comments yet opposing more U.S. troops for the war in Afghanistan.
The Pennsylvania lawmaker and Vietnam veteran, who plays a crucial role in forming the budgets that would fund an increased troop presence, is skeptical of the basic logic of adding personnel.
"In Vietnam it took 500,000 troops and that didn't solve the problem. So we have to take a different approach," Murtha told The Cable in an exclusive interview. "I think that's what McChrystal is trying to do," he said, referring to Gen. Stanley McChrystal, the top U.S. military commander in Afghanistan, who recently delivered a status report to the White House on the situation there.
Murtha's dissent comes at a critical juncture, with the Washington debate heating up and public support for the war effort dropping. The Pennsylvania congressman is only the latest senior Democratic lawmaker to come out against a troop increase, following similar statements last week by House Speaker Nancy Pelosi and Senate Armed Services Committee chairman Carl Levin.
But opposition from Murtha, who has deep contacts among the military brass, could ultimately prove more problematic for an Obama administration that has yet to launch a full-throated to defense of the war. In 2005, the congressman's call for a rapid pullout from Iraq rallied the anti-war camp and led to a series of fights with the Bush administration over restrictions that Democrats sought but ultimately failed to attach to war funds. This time, he's going against a president of his own party.
McChrystal's status report did not include specific requests for more troops. Those are expected in the coming weeks. But Murtha said that it was premature to add more troops to Afghanistan, especially since the current plan to increase U.S. forces there to the level of 68,000 is still underway.
"Look how long it took us to get 22,000 more troops, it took 18 months! Jesus Christ!" said Murtha, "When they talk about more troops they act as if you can send them in immediately."
8) Illiteracy undermines Afghan army
Fisnik Abrashi, Associated Press, Monday, September 14, 2009 2:51 PM
Kabul - Afghan army recruit Shahidullah Ahmadi can't read - and neither can nine out of 10 soldiers in the Afghan National Army.
The lack of education points to a basic challenge for the United States, as it tries to expand the Afghan army in the hopes that U.S. and allied forces can one day withdraw. Just as in Iraq - and perhaps even more so - the U.S. is finding it no small task to recruit, train and equip a force that is large and competent enough to operate successfully on its own.
"I face difficulties. If someone calls me and tells me to go somewhere, I can't read the street signs," Ahmadi, 27, a member of a logistics battalion, said while walking through downtown Kabul. "In our basic training, we learned a lot. Some of my colleagues who can read and write can take notes, but I've forgotten a lot of things, the types of things that might be able to save my life."
The Associated Press interviewed recruits and visited a training center to gain a better understanding of the obstacles toward eventually handing over responsibility of security to the Afghan army so that international troops can go home.
Polls show that the army is the most trusted Afghan institution, a testament to the relative success it has had, especially compared with the police, who are widely derided as corrupt. But about 90 percent of those deciding to join the army are illiterate, according to U.S. military officers involved in the training.
That's higher than the 75 percent national illiteracy rate, because military recruits come from lower classes where few know how to read.
The lack of basic reading skills slows down progress in an already short 10-week training course. It means soldiers cannot use maps properly or understand the army's code of conduct. It also increases the difficulty of building a solid core of noncommissioned officers - sergeants who are the backbone of every successful army, responsible for conveying a commander's written orders to the troops.
Most Taliban guerrillas also can't read and write, but they don't need to as much.
Understanding maps and signs is important for the Afghan army, which is supposed to deploy anywhere government control is challenged.
The Taliban, however, strike on their own timetable - usually wherever government and NATO forces are weakest. They move among friendly, generally ethnic Pashtun communities and rely on local guides. Many Taliban fighters operate in areas of the country where they grew up, making maps and compasses unnecessary.
The Taliban also generally operate in small units. They use hit-and-run insurgency tactics or lay bombs along roads, highly effective techniques that don't require the same level of sophistication and attention to detail as conventional military tactics, which often use helicopters, artillery, armored vehicles and large numbers of troops.
To overcome the problem for the Afghan army, a private company, Pulau Electronics of Orlando, Fla., has been hired to run a program that aims to make 50 percent of the troops "functionally literate," within the first year of the program. "The target is for them to be able to write their name and their weapon's serial number," said Joe Meglan, 39, of Savannah, Ga., who works for Pulau.
In the meantime, illiterate soldiers in the army are scraping by. "Unfortunately all my friends and I cannot read," said soldier Rosey Khan, 19. "It is very bad, particularly during the fighting. They taught me a lot of things, but I've forgotten most of them. ... Even the officers cannot read."
9) Vote fraud hard to pin down in Afghanistan
Charlotte McDonald-Gibson, AFP, Sun Sep 13, 6:53 am ET
Kabul - The allegations in Afghanistan's post-election fray come thick and fast: intimidation, ballot box stuffing, suspiciously high turnout, incredible numbers of votes for one candidate at polling stations. Contenders hoping to unseat President Hamid Karzai are crying foul but in a nation where democracy is only five years old, decisions are traditionally made collectively and only 30 percent of people can read, fraud is never clear cut. "What is fraud where we come from is not fraud here," said one Western official who asked not to be named.
With ballots in from most of the polling stations in August elections, Karzai looks set to win a second term - with 54.3 percent of the count so far - but it could be weeks before claims of electoral fraud are resolved. Nader Nadery of the Free and Fair Election Foundation of Afghanistan, said fledgling democracy must not be used to excuse fraud and urged thorough audits into all allegations, even if it means dragging the process out still further.
Most Afghans live in rigid hierarchical societies in rural areas, loyal first to their ethnic group then to their local tribe, where elders have immense power to guide the decisions - and votes - of the people they are responsible for.
In the village of Hashim in eastern Paktya province, labourer Jawar Khan said that ahead of the elections, calls were made over the loudspeakers at the mosque urging people to vote for Karzai. "The votes in our village were more than 20,000, I think out of them only 300 would be cast for others," he said. "I think no one has a problem giving their vote to Karzai. We have tribal agreement - when tribal elders request anything we cannot avoid it."
Ahead of the elections, Karzai deftly plotted on Afghanistan's political and ethnic chessboard, wooing influential kingmakers across the country and thus securing the votes of their flocks.
The ECC has ordered the audit and recount at polling stations where more than 95 percent of ballots were cast for one candidate.
Nadery said that block votes instructed by a tribal leader could account for some of those cases and would not therefore be fraudulent, but added that each claim must be investigated as ballot-stuffing or intimidation could be to blame. "It is a violation of the process if one can find that there was pressure exerted by the elders," he said.
The threat of Taliban attacks is also believed to have kept turnout to just 30-35 percent, creating more complexities.
Haji Sarwar of Wasi Mohammad village in Ghazni province, said people in his village had gathered early to vote but warnings that militants were approaching sent them fleeing. "The voters all escaped and the ballot boxes were also taken to a safe place in a mosque. The people in the village decided that two elders take all the votes of people and cast them into the ballot boxes," he told AFP.
Further compounding the problem is the woeful education in the fifth poorest country in the world. Two-thirds of people would not be able to read the names on the ballot paper. Among women, illiteracy soars to more than 85 percent.
Gulu Jan, from Langar Khail village of Ajristan district in Ghazni province, said elders had decided who people should vote for in both the presidential and provincial council elections and cast votes for them. "They helped us and spared all the women the trouble of going and voting," he said. "It is difficult to vote. The women and most of the men are not literate, and they cannot vote."
10) West Bank Settlers Dig in, but Resolve May Have a Limit
Ethan Bronner and Isabel Kershner, New York Times, September 14, 2009
Havat Gilad, West Bank - Of the hundreds of thousands of Israeli settlers in the West Bank, those who live in unauthorized hilltop outposts like this one, a hardscrabble unpaved collection of 20 trailers, are considered the most dangerous.
They are fervent believers that there is a divine plan requiring them to hold this land. With many of them armed and all of them furious over the 2005 withdrawal of Jews from Gaza and four West Bank settlements, they live by the slogan: "Never forget! Never forgive!" The building of a Palestinian state would require them to move, and Israelis fear that any attempt to force them out could cause a bloody internal clash.
But scores of interviews over several months, including with settler firebrands, produced a different conclusion. Divided, leaderless and increasingly mystical, such settlers will certainly resist evacuation but are unlikely to engage in organized armed conflict with the Israeli military. Their belief that history can be best understood as a series of confrontations between the Jews and those who seek their destruction, and their faith in their ultimate triumph, make them hesitant to turn against their own, even in dire circumstances.
Jewish terror is not new. A religious student assassinated Prime Minister Yitzhak Rabin in 1995, and a settler, Baruch Goldstein, killed 29 Muslims at prayer in Hebron in 1994. Yitzhak Fhantich, who used to lead the Jewish section inside the Shin Bet security agency, said that based on recent history and the goals of extremists, "I cannot exclude that there will be violence, that the prime minister could be targeted or that mosques could be attacked. They are looking to stop any peace process."
But interviews with settlers suggest that the threat of violence is largely a political strategy. The great majority say they realize that if the bulldozers arrive, their fight is over. "We cannot allow ourselves to wait until the soldiers are at our doors," noted David Ha'ivri, a spokesman for the northern West Bank settlers. "We must prepare strategic maneuvers in advance."
By that, he mostly means politics. If the soldiers do come, the settlers are unlikely to fight. "People won't leave their homes peacefully but they will not shoot soldiers," predicted Shaul Goldstein, who is the leader of the regional council of the Gush Etzion settler bloc and is considered a moderate.
A senior Israeli general in the West Bank agreed. He said the army was awaiting orders to evacuate the two dozen outposts and was preparing for everything, including soldier refusal and settler bloodshed directed both at Palestinians and at security forces. But, he added, speaking under army rules of anonymity: "I don't think there will be a lot of resistance. Deep inside, most settlers love Israel and love the Israeli Army."
That assertion may seem surprising, especially after the army's removal of 8,000 settlers from Gaza four years ago, an operation that burns in the hearts of the settler community. But there are several reasons to take it seriously.
First, the Gaza operation splintered the settlers, discrediting the traditional leaders in the eyes of the new generation.
Second, many settlers believe that they and their supporters are inheriting the mantle of Zionism, so promoting an internal war would be counterproductive.
There are 300,000 settlers in the West Bank (another 200,000 Israeli Jews live in East Jerusalem) and they are not monolithic. A third are politically and socially indistinguishable from most of Israel and moved there for suburban-style housing and close-knit communities. Another third are ultra-Orthodox and do not consider themselves settlers or Zionists, wanting only to live together in an appropriate environment somewhere in Israel.
The remaining 100,000 are ideologically (and, most of them, religiously) committed to staying. They have a fairly uniform view of the situation: most believe that there is no such thing as a Palestinian nation; that if the world wants a state for Palestinians, it should set it up next door in Jordan; that all of the West Bank, which they call by the biblical name Judea and Samaria, is a central part of the Jewish homeland; and that Arabs will do everything they can to destroy Israel in any borders, so staying in the West Bank is a matter not only of history but of security.
While the ultra-Orthodox say life comes above all else, ideological settlers say that holding onto what they consider the entire land of Israel is the essence of life; through redemption of this land comes Jewish salvation.
But half of them live in settlement blocs close to the boundary with Israel that are likely to remain in a deal involving land swaps with the Palestinians. Ideological settlers who live deep in the West Bank number about 50,000.
11) Ecuador's "innovative" default good for economy
Reuters, 13 Sep 2009 16:56:40 PST
Quito - Ecuador's 2008 debt default was decried by Wall Street as the first example of a solvent country refusing to pay global bonds, but Nobel Prize-winning economist Joseph Stiglitz says the economy has benefited from the move.
Investors howled when socialist President Rafael Correa defaulted on $3.2 billion in debt, even though the economy was growing and state coffers brimmed with oil money at the time.
The OPEC-member country argued that the bonds were unfairly contracted years earlier by corrupt officials in league with greedy international bankers, rendering the debt "illegitimate." A left-leaning audit committee convened by the government issued a 172-page report supporting the default.
In June Ecuador bought back 91 percent of the bonds in a deal that fetched higher-than-expected participation from cash-strapped investors hit by the world financial crisis.
"It was a very interesting and innovative idea to do the audit, trying to understand where the debt came from and the legitimacy of the indebtedness," Stiglitz told Reuters in a telephone interview from New York. "It is something that other countries ought to consider," he said. "There are benefits and costs, but it is clear that Argentina is better off after its (2002) default than it was before. Russia is better off after its (1998) default."
Ecuador has improved its position as well, he said, as reduced debt fees allow the economy to rebound more quickly than it otherwise would from the global slowdown.
The government defaulted on its bonds due in 2012 and 2030, which were contracted as part of the restructuring of the country's Brady debt in 2000. The auditors said that restructuring imposed overly harsh terms on Ecuador and violated local law.
The government expects a 2 percent gross domestic product expansion this year and 3.4 percent growth in 2010 despite unstable oil demand due to the world slowdown. The economy grew 6.5 percent in 2008, when petroleum prices were stronger. "Creditors want to persuade countries that they should never default," Stiglitz said. "But for Ecuador itself, it means it is less burdened by debt and will be able to grow faster."
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