DTN News: North Korea Worthless Cash ~ Currency Reform May Unsettle North Korean Leadership*Source: DTN News / BBC By Marcus Noland Peterson Institute for International Economics
(NSI News Source Info) HONG KONG - February 7, 2010: North Korea's unexpected currency reforms destabilised its economy - but are they likely to unsettle the country's politics as well?
On 30 November 2009 North Korea launched a surprise confiscatory currency reform aimed at cracking down on burgeoning private markets and reviving socialism.
The move predictably set off chaos, and now it appears that the government is in retreat, acquiescing in the reopening of markets.
Now the question is what impact this episode may have for North Korea's looming leadership transition.
During the 1990s the state found it was no longer able to fulfil its obligations under the old centrally planned system. As a result, the North Korean economy was forced to adopt some free market principles.
Small-scale social units - households, work units, local government offices, and party organs - and even small-scale military units began acting entrepreneurially to survive.
The announcement set off panic buying as people rushed to dump soon-to-be-worthless currency
This free-market pressure from below received an enormous push during the famine period of the mid-1990s, when perhaps 600,000-1m people, or roughly 3-5% of the pre-crisis population, died.
The regime is extraordinarily insecure about the domestic political implications of economic change. At times it has acquiesced in ratifying the facts on the ground, while at other times has sought to reverse the process.
The trend over the past five years has been largely negative, and confiscatory currency reform could be interpreted as the latest in a series of moves designed to re-assert state control over the economy.
In principle, currency reforms are not a bad thing.
Governments often use them to signal after a period of high inflation that the bad days are in the past, and that they will pursue more responsible macro-economic policies in the future.
Typically, a government issues new currency with a number of decimal places or zeroes removed, often linking the nominal value of the new currency to a well-known currency such as the dollar or euro.
In recent years countries such as Turkey, Romania, and Ghana have implemented such reforms. The North Korean case is significantly different from the conventional examples in that the move was sprung on the populace without warning, and most critically, enormous limits were placed on the ability to convert cash holdings.
In effect this wiped out considerable household savings and the working capital of many private entrepreneurs.
Citizens were instructed that they had one week to convert a limited amount of their old currency to the new currency at a rate of 100:1 (that is, one new won would be worth 100 old won).
But the limit would not buy much more than a 50kg sack of rice at prevailing retail prices.
The announcement set off panic buying as people rushed to dump soon-to-be-worthless currency, buying foreign exchange or any physical good that could preserve value.
As the value of the North Korean won collapsed on the black market, the government issued further edicts banning the use of foreign currency, establishing official prices for goods, and limiting the hours of markets and products that could be legally traded.
However as social opposition to these moves began to manifest itself, the government was forced to backtrack, offering compensatory wage increases, sometimes paying workers at the old wage rates in the new currency, amounting to a 100-fold increase in money income.
The result has been a literal disintegration of the market, as traders, intimidated by the changing rules of the game, withheld supply, reportedly forcing some citizens to resort to barter.
Reports - difficult, if not impossible, to confirm - have emerged of civil disobedience, protests, and even physical attacks on government officials trying to enforce the tightened restrictions.
In the latest twist, the government appears to be in retreat - easing restrictions on markets and, according to some reports, scapegoating Pak Nam-gi, the Korean Workers Party Director of Finance, for the failed policy.
The politics of the episode clearly leave many questions unanswered.
Despite the fact that the reform was the year's single biggest economic event, it went unmentioned in the traditional joint New Year's Day editorial of several official publications.
Some reports emerging from the diaspora network of North Korean refugees indicated that the policy was being undertaken in the name of Kim Jong-eun, the North Korean leader's third son and purported successor, and was meant to signal his emergence as a major political figure.
Now it is an open question whether the fiasco has damaged his succession prospects in what is beginning to look increasingly like a nuclear-capable failing state.
Marcus Noland is Deputy Director and Senior Fellow Peterson Institute for International Economics and Senior Fellow East-West Center
DTN News: Snowstorm Paralyses Washington DC And Eastern US*WASHINGTON SNOWSTORMS *More than 1ft (12in, 30.5cm) of snow has fallen only 13 times since 1870 *Heaviest on record is 28in (71cm) in January 1922 *Worst snowfall is believed to have hit in 1772, before records began, with as much as 3ft*Source: DTN News / BBC
(NSI News Source Info) TORONTO, Canada - February 7, 2010: The heaviest snow storms for decades have struck the eastern US, paralysing air and road transport, and bringing Washington DC to a standstill.
The storm knocked down power lines and left hundreds of thousands of people without electricity.
Nearly 2ft (60cm) of snow had fallen by noon on Saturday in cities across the region, the Associated Press reports.
The governors of Washington DC, Virginia and Maryland have declared states of emergency.
West Virginia, Delaware, Pennsylvania and New Jersey are also affected.
Jim Rohacik skies in front of the White House in Washington February 6, 2010. A blizzard producing heavy snow and powerful winds pummeled the U.S. mid-Atlantic on Saturday, causing at least two fatalities and paralyzing travel in the region. Local weather forecasters said the storm could bring the heaviest snowfall in 90 years to the Washington area.
The National Weather Service declared a 24-hour blizzard warning for the Washington-Baltimore region until 2200 on Saturday (0300 GMT on Sunday). A police office guards a deserted street near the White House in Washington, Saturday, Feb. 6, 2010, as President Barack Obama's motorcade passed by.
Most flights from the Washington-Baltimore area's three main airports and Philadelphia International Airport have been cancelled.
Hundreds of car accidents were reported, including two fatalities - a father and son who died while helping another motorist in Virginia.
US national rail service Amtrak cancelled a number of trains between New York and Washington, and also between Washington and some southern destinations.
Local weather forecasters said the Washington area could see its heaviest snowfall in 90 years.
It comes less than two months after a December storm dumped more than 16in (41cm) of snow in Washington.
The usually traffic-heavy roads of the capital were deserted, while the city's famous sites and monuments were covered with snow.
DC traditionally panics when it comes to snow - this time, it may be more justifiable than most times.
Becky ShippResident of Arlington, Virginia
The Washington Metro was operating only on underground lines, and bus services were cancelled.
US government offices in the Washington area closed four hours early on Friday, while the Smithsonian museums and National Zoo were closed on Saturday.
Debi Adkins, who lives just outside the city of Baltimore, told the BBC: "The snow started at 1130 yesterday morning and it just hasn't stopped... about 20 inches came overnight - and thunder and lightning.
"I'm not going anywhere - I couldn't if I wanted to. You just can't get your cars out. The front door of the building I live in is closed shut, so I just can't get out."
Ushaa Shyam Krishna in Chantilly, Virginia, said he - like many others - had stocked up on essential food items ahead of the storm.
"For the first few hours after the storm began, my daughter and I tried to shovel the snow, but now we have given up," he said.
"On Thursday the supermarkets were half empty - we went again yesterday and the shelves were totally empty."
*Source: DTN News / Int'l Media
(NSI News Source Info) KARACHI, Pakistan - February 6, 2010: Thousands of people Saturday attended the funeral of 14 people killed in Friday's double bomb attack in Karachi, as the death toll from the assault rose overnight to 31.
“Six more people died overnight, raising the death toll to 31,” provincial government spokesman Jameel Soomro told AFP.Hundreds gather around the bodies of bomb victims, who were killed in an attack on a bus of Shi'ites Muslims travelling to a religious procession, during their funeral prayer in Karachi February 6, 2010. Pakistan's commercial capital Karachi was tense on Saturday a day after two bombs killed 25 people, raising further questions about the effectiveness of security crackdowns on al Qaeda-linked militants. Written on the white sheets covering victims are Shi'ite religious slogans.
He said at least 170 wounded people were being treated at various hospitals around Karachi.
At a funeral Saturday for some of those killed, thousands of mourners beat their chests and cried loudly as the bodies of 14 victims were brought to a Karachi sports field.
Pakistani TV channels broadcast live footage from the venue, showing men and women clad in black and carrying black flags, beating their chests and chanting slogans of “Ya Hussein, Ya Hussein.”
“More than 10,000 people attended the funeral of the 14 deceased,” said a local police official, Javed Mehr, who was deployed at the ground.
Mehr told AFP that “the entire area was sealed off by police and paramilitary rangers to avoid any untoward incident.”
Police and paramilitary rangers patrolled streets and sensitive areas and Mehr said security had been stepped up at all hospitals and sensitive areas around Karachi, which has been swept by political violence in recent months.
Most shops in the sprawling city of 18 million people were closed and public transport was off the roads as several thousand mourners gathered at funerals of some of the victims of the two bombs.
Paramilitary spokesman Maj. Aurang Zeb said security forces were on maximum alert at the funeral in the Malir area of the city. In this image taken from video on Friday Feb. 3, 2010, reportedly showing Taliban militants flogging a person in the Pakistani tribal area along the Afghanistan border. This new video has emerged which was purportedly filmed Feb. 3, shows a senior Taliban commander meting out a brand of traditional tribal justice in Pakistan's Orakzai tribal region. Although there is no independent verification of the incident, the video was filmed on a mobile phone and appears to show two men being flogged, and a teenage boy, allegedly beaten for not growing a beard.
The first attack on Friday killed 12 Shias, followed hours later by a blast at a hospital where the wounded were being treated which killed 13 people.
“It looks like there's no government in Pakistan,” said Syed Shabbir Hussain, who lost a cousin in the first blast on Friday.
“They always say that there are militants here, and that they will attack. And then they attack, but the police and the government do nothing,” he said at his cousin's funeral.
Police had initially suspected that the two attacks in Karachi were carried out by suicide bombers but later said the devices were planted. A third bomb, defused at the hospital, was similar in type, indicating just one group was involved.
Senior police investigator Raja Umer Khattab said the Jundullah (Army of God) militant group was behind the attacks.
“This is the same group that carried out the Ashura attack,” he said, referring to a bomb attack at a Shia procession in late December that killed 43 people.
Khattab said some arrests had been made after the December attack but police were hunting for more members.
“We have arrested four members of this group but there are still 12 to 14 militants of this group left, who are planning these attacks,” he said.
The MQM has announced three days of mourning to remember those who lost their lives in the double bombing.
The Jaffria alliance has also called for a citywide strike against the horrifying incident.
The head of the Jaffria Alliance, Allama Abbas Komeli has demanded that the government provide compensation to the victims' families.
Poltical parites, including the MQM and the ANP have urged the people of Karachi to exercise restraint following the carnage.
Ulema from different schools of thought have strongly condemnned the blast and also announced a mourning period.
The Shia Ulema Council gave a call for mourning soon after the second blast at the Jinnah Postgraduate Medical Centre, and appealed to the masses to keep their mourning peaceful and not to get provoked by the fresh series of attacks on processions.
DTN News: Indian Navy ~ Multi-Nation Exercise Not To Create Anti-China Bloc
*Navies of 13 countries in joint exercise off Andaman islands
*Source: DTN News / Int'l Media
(NSI News Source Info) NEW DELHI, India - February 6, 2010: Even as India kicked off the largest ever edition of its ‘Milan’ set of exercises, in which 12 countries from the region are participating, Navy Chief Admiral Nirmal Verma has said the multi-nation exercise is not aimed at creating a security bloc against China.
Emphasising that the Milan exercise, in which 12 warships from nations like Australia, Singapore, Malaysia, India and Indonesia are taking part, is aimed at humanitarian relief and disaster management, Verma said, adding that there is no question of it being seen as a security threat by any nation. “Milan is not aimed at the security aspects. Its theme is more at coming together in areas where we can jointly tackle natural and manmade disasters,” he said, interacting with mediapersons after addressing an international seminar on disaster relief operations, which is part of the exercise.
The Navy Chief was answering queries on whether such a large scale exercise — this is the largest build-up of warships in the area in the recent past — would trigger suspicions in China which is steadily increasing its maritime presence in the region. The Andaman Nicobar Command (ANC), incidentally, is the closest Indian naval establishment to China.
China had earlier accused India of trying to create a security bloc against it when the multi-nation Malabar exercise was held near the Andaman Islands in 2007. Beijing had raised fears that a security quadrilateral consisting of the US, India, Australia and Japan, all of which had taken part in the Malabar exercise, was grouping against it in the Indian Ocean Region. Incidentally, several participating countries at Milan too have outstanding maritime border issues with the Asian giant.
Though Admiral Verma on Friday played down speculation of an anti-China bloc he acknowledged that India is strengthening its military infrastructure on the Andaman Nicobar island chain.
While the Army has an assault brigade on the island and the Air Force can operate fighters as well as transport aircraft from different air strips on the island chain, a new all-weather airbase is coming up north of Port Blair.
Meanwhile, after the traditional welcome at Port Blair, officers from all the participating countries took part in a table top exercise code-named ‘Milan Perseverance’. Besides the humanitarian aspect, the table top exercise also focused on jointly dealing with piracy, gun-running and illegal migration.
DTN News: Australian F-111 makes Airshow Emergency Landing *Source: DTN News / Int'l Media By CHUN HAN WONG,Associated Press Writer
(NSI News Source Info) SINGAPORE - February 6, 2010: Australia's air force said Saturday that one of its F-111 jets made an emergency landing earlier this week during an aerial display at the Singapore Airshow and will not participate in further performances. An F-111 of the Royal Australian Air Force showcases a fuel dump and burn procedure during an aerial display in Singapore. The air force said Saturday, Feb. 6, 2010 that one of its F-111 jets made an emergency landing after receiving an engine fire warning just two minutes into its seven-minute performance during Thursday's aerial display and will not participate in further performances.
The F-111's aircrew radioed a distress call after receiving an engine fire warning just two minutes into its seven-minute performance Thursday, said Royal Australian Air Force Flight Lieutenant Leon Izatt, who was part of a two-man team piloting the jet.
Its crew immediately terminated the flight and made an emergency landing on one of the plane's two engines.
The airshow was likely to have been the last for the jet as Australia's air force plans to retire its F-111 fleet in December.
Singapore's airshow, which has featured displays of mostly military jets and helicopters this week and ends Sunday, had already been marred by an earlier incident on the same day when a South Korean T-50 Golden Eagle jet was ordered by organizers to terminate its performance after it flew too close to spectators.
Wing Commander Micka Gray said there were no signs of a fire on the F-111. The plane remains grounded while maintenance crews investigate why the aircraft's fire warning went off.
DTN News: Singapore Aborts Flight Show After Safety Breached*Source: DTN News / Int'l Media
(NSI News Source Info) SINGAPORE - February 6, 2010: Singapore aborted a flight display at its international airshow on Thursday after a South Korean pilot steered his jet too close to spectators, witnesses and the show organiser said. The T-50 Golden Eagle, formerly known as the KTX-2, jet trainer and light attack aircraft is being built for the Republic of Korea Air Force (RoKAF). The aircraft is being developed in the T-50A advanced trainer and T-50B lead in fighter trainer versions. The T-50 LIFT is called the A-50 by RoKAF. The T-50 is designed to provide pilot training for current and next-generation fighters like advanced F-16s, F-22s and the joint strike fighter. The first flight of the T-50 took place in August 2002. The RoK Air Force has a requirement for 50 T-50 trainers and 44 T-50 LIFT. RoKAF placed a production contract for the first 25 T-50 in December 2003 and the first production aircraft was rolled out in August 2005. The first two aircraft were delivered to RoKAF in December 2005 and the aircraft entered service in April 2007. 13 aircraft are currently operational. Two squadrons (30 to 40 aircraft) are due to be operating by 2008. 1,000 flights have been completed in the test programme. The A-50 made its first flight in September 2003. A programme of weapon delivery flight testing is continuing and deliveries of the A-50 are planned to begin in 2009. In December 2006, the RoKAF placed a second production contract for 50 T-50 and A-50 aircraft.
KAI is developing a fighter version based on the T-50, called the F/A-50 for the RoKAF, which has a requirement for 60 aircraft to replace the F-5. It is planned that the F/A-50 will be fitted with an active electronically scanned array (AESA) radar.
An aerial display, which was supposed to last for eight minutes, was shortened to less than half that after the error by the T-50 Golden Eagle jet, owned by the Korean Aerospace Industries.
"The T-50 Golden Eagle's flight this afternoon was observed to have infringed the safety boundaries and the pilot was instructed to terminate his flying display as a precaution," Singapore Airshow's Marilyn Ho said in an email to Reuters.
"The Singapore Airshow has strict safety standards for all aerial displays. Proper safety markers and boundaries are in place to ensure the safety of the audience and the pilots." The week-long biennial Singapore Airshow kicked off on the densely populated island-state on Tuesday and is due to open to public this weekend, when thousands of spectators are expected to visit.
Thursday's flight display was watched by hundreds of trade visitors -- many of whom were wowed by the aircraft's proximity as it approached the show centre's seaside grounds, and then made an acute turn back out to sea, a witness told Reuters. "I was surprised at how low the aircraft was flying. First, I thought it was part of the thrill factor, but found it anti-climaxed when I didn't see the jet return, only to realise that the show had ended," said a Singaporean photographer who didn't want to be identified.