Monday, June 30, 2008

The Art of Ousting Mugabe

Robert Mugabe Zimbabwe
Zimbabwe's President Robert Mugabe casts his ballot at a polling station in Harare on June 27, 2008
Alexander Joe / AFP / Getty

By proceeding with his one-candidate election on Friday, Zimbabwe's President Robert Mugabe has thumbed his nose at the international community. So what is the international community going to do to ensure compliance with democratic norms by the leader of a landlocked country whose economy is in free fall and its people increasingly dependent on food aid? Not too much, it seemed on Friday, when U.S. Secretary of State Condoleezza Rice, speaking at the G8 foreign ministers conclave in Kyoto, vowed to bring the matter up at the U.N. Security Council. No decisive action ought to be expected from that forum, in which China has long shown itself willing to wield its veto to prevent economic sanctions against its African trading partners (of which Zimbabwe is one). Statements of outrage from European governments were scarcely more specific, although British officials said they planned to expand the number of Mugabe cronies on travel-ban lists, and to press the European Union to tighten sanctions.

The contrast is stark between the world's response to the plight of the Zimbabweans and its engagement in southern Africa's last great battle against tyranny — the struggle against apartheid in South Africa. From campuses and civil society groups to the corridors of power throughout the Western world, the pressure was on for divestment and economic sanctions against the white-minority regime. And that pressure paid dividends when financial sanctions at a critical moment denied the regime access to credit and loans it desperately needed, helping nudge it to concede to the principle of majority rule and a handover of power to the democratically elected government of President Nelson Mandela in 1994.

The integration of the world's economy over the past two decades has made imposing sanctions a far more daunting challenge today than it had been during the anti-apartheid era. Whereas most of the major foreign investors in South Africa during the 1980s had been U.S. and European corporations, effective sanctions today would require support from the world's emerging economies, particularly in Asia, where the tactic is unpopular. "The appetite for international sanctions has decreased massively in the last 10 or 15 years because it's seen as much more difficult to enforce," says Thomas Cargill of the London-based think tank Chatham House. And since millions of Zimbabweans are struggling simply to survive, Western officials fear that sanctions could render them totally desperate — and more dependent than ever on Mugabe's regime. That's one reason why South Africa — where 1.5 million Zimbabweans are currently seeking refuge, their presence raising the recently violent ire of many poor South Africans — has held off from putting a chokehold on Zimbabwe, to which it supplies massive amounts of electricity. And if oil companies withdrew from Zimbabwe, for example, government officials would likely smuggle in enough fuel to keep the regime running, says Cargill, while "ordinary people would either have none or would have to request it from the government."

Some European governments have recently moved to cut business ties. German officials on Friday ordered a Munich company, Giesecke and Devrient, to stop supplying Zimbabwe with the paper on which it prints its near-worthless banknotes — with Zimbabwe's estimated annual inflation rate at about 165,000%, the printers of Zimbabwe dollars have been a regular client of Giesecke and Devrient.

But there's been no rush for the exits by the corporate giants that have helped keep Zimbabwe ticking along, including Royal Dutch Shell, British American Tobacco, and the Anglo American Corporation, which owns a platinum mine in the country. Many of the 79 companies listed on the Harare Stock Exchange are, in fact, earning solid returns, despite the daily misery of most Zimbabweans amid severe shortages of food, electricity and fuel. Last year the London-based commodities firm Lonrho began an investment fund called LonZim, aiming to snap up investments before the collapse of Zimbabwe's government. Zimbabwe's immense mineral wealth was "cheap as chips" and going for "fire-sale prices," Lonrho Africa's chairman David Lenigas told reporters when the fund launched. Investors willing to take the risk now could be well positioned to take advantage of the immense opportunities of a post-Mugabe economy being rebuilt from scratch.

Western governments have been slow to try political negotiations, or even to enact cost-free sanctions against Mugabe. In part, this is because European and U.S. officials believe that the African Union — whose summit is underway in Egypt — should spearhead negotiations on Zimbabwe. Yet the West has so far balked at the solution which South Africa, the most important player, has in mind: a deal for Mugabe to share power with his enemies in exchange for amnesty from prosecution in an international tribunal. It was only last week that Britain stripped Mugabe of the honorary knighthood conferred on him by Queen Elizabeth II in 1994, and canceled a planned cricket series between England and Zimbabwe. The country's athletes are headed to next month's Olympics in Beijing; among them is Kirsty Coventry, who won a swimming gold medal at the Athens Olympics in 2004, earning her the affectionate nickname "golden girl" from Zimbabwe. By contrast, South Africa's athletes were banned from Olympic competitions for three decades, and being barred from international competition in rugby and cricket was a psychological blow to the white minority.

"There has been an element in Britain and elsewhere which sees these sports teams as victims," says Cargill, "There is an uneasiness with making them suffer."

Yet even long-suffering Zimbabweans know that no regime is forever. Back in 1965 the country's white ruler Ian Smith — who declared unilateral independence from Britain of what was then called Rhodesia — vowed that "not in one thousand years, not in my lifetime" would black majority rule come to the country. Fifteen years later he retired to his farm, after being ousted from power — by a liberation movement led by Robert Mugabe.

Original here


C4 pays £150,000 to free kidnapped film maker from terror camp


Documentary film maker Sean Langan

Langan, a father of two from west London, and his interpreter were freed last Sunday

Channel 4 paid a £150,000 ransom to secure the release of a documentary film maker who was held hostage for three months after trying to make contact with Al-Qaeda’s second in command.

Sean Langan, 43, was held by criminals linked to the Taliban at a terrorist training camp in a lawless border region of Pakistan.

His kidnappers threatened to shoot the journalist and his interpreter if a ransom was not paid.

The two men, who were working for Channel 4’s Dispatches programme, were released after an Afghan go-between hired by the broadcaster delivered a briefcase full of cash to their kidnappers. The Foreign Office is believed to have warned Channel 4 against paying any money, fearing that it could inspire copy-cat abductions of westerners.

Langan’s family and the broadcaster learnt he was being held hostage eight weeks after he disappeared in March. They hired well-connected Afghan journalists to negotiate his release.

Langan, a father of two from west London, and his interpreter were freed last Sunday. The film maker is now back in Britain.

“I thought it would be a miracle if I got out of there alive,” he said this weekend. “Death was at my door every night. It makes you see your life like never before.”

Langan, who has made two previous Dispatches films in Afghanistan, lost three stone to a bout of dysentery during his time in captivity at a mountain compound in Pakistan’s Federally Administered Tribal Area (FATA), close to the Afghan border. He and his Afghan interpreter were kept in a darkened cell, measuring 8ft by 8ft, within earshot of a Taliban firing range.

“It was a constant barrage,” a close friend in Kabul said. “They could hear machineguns, antiaircraft guns and rocket-propelled grenades going off the whole time. But they weren’t being shot in a contact [firefight] – it sounded like training.”

The two hostages were given access to a radio tuned to the BBC World Service, but this only added to their despair when they failed to hear any news about their plight. “I reasoned that if I wasn’t on the news, then no one was even looking for me,” Langan said. “And yet, bizarrely, I never gave up.”

His captors eventually made Langan call a friend in Kabul and explain that he was a hostage and that he would be killed if their demands were not met.

British intelligence was immediately called in to investigate, but sources claim that Channel 4 executives were loath to cooperate with the Foreign Office because they feared the government would try to stop them paying a ransom.

At one point MI6 officers – acting on the orders of Cobra, the top-level government security committee – raided the hotel room in Kabul where Langan stayed before the fateful assignment. They were searching for clues that they suspected Channel 4 was refusing to share.

Langan had travelled through the Khyber Pass in March to meet a group of men in Peshawar who promised to introduce him to Siraj Haqqani, leader of the Taliban in eastern Afghanistan, and get him answers on video from Ayman al-Zawahiri, Al-Qaeda’s deputy leader.

The men claimed to be members of the Taliban, but security sources in Kabul dismissed them as “two-bit criminals” interested only in money. “They had very close links to the Taliban and they were based in a Taliban area but they weren’t the real deal,” one official said.

The men blindfolded Langan and his interpreter and drove them beyond the safety of Peshawar on March 28 to Bajaur Agency, the northernmost district of FATA, which is known to be a Taliban stronghold.

“They’d given the men their cameras to take up separately, so they could check they weren’t bugs or bombs,” a friend of Langan said, “but after three days the cameras didn’t show up and they knew something was wrong.”

Langan and his interpreter were held in a spartan cell, which had a hole in the ground for a toilet, and were brought two meals a day of bread and “stringy” meat.

Four days after their arrival at the mountain compound, they were told they had been kidnapped. “They said to my translator, ‘You are working for foreigners, so you are a spy’,” Langan said. “And they said to me, ‘You are a foreigner, so you are a spy.’ I thought we were dead for sure because the Taliban usually execute spies summarily.”

Langan’s captors are thought initially to have demanded more than £1.5m and the release of high-ranking Taliban prisoners in return for his freedom.

They apparently dropped their price after senior Taliban commanders turned on them for abducting a journalist in their name inside Pakistan at a time when the international community was heaping pressure on Islamabad to drive out insurgents.

“Sean could hear the Pakistani authorities denying the very existence of Taliban safe havens on the radio, but he could hear them training every day,” a friend said. “He was terrified his kidnappers would just kill him if it got too political and dump his body back in Afghanistan.”

Langan, who was allowed to write a journal during his ordeal, kept a candle burning at night so that he could see the face of his killer if someone entered his cell to slit his throat.

Friends said he came to terms with the idea of being shot but was afraid that he might be beheaded. He was plagued by the thought that his two sons, Luke, five, and four-year-old Gabriel, would think he had abandoned them.

Sources close to the negotiations revealed that Channel 4 agreed to pay a ransom of $300,000 (£150,000) for his freedom. Langan had refused to leave without his interpreter.

Channel 4 said: “This was a very complex and delicate negotiation and Channel 4 provided Sean’s family with support and expert advice. We don’t think it is appropriate to go into the detail of the dialogue that was necessary to secure Sean’s release. We shared information with the Foreign Office throughout this process.”

Original here

Gold revs its engine and squeals down the track

Myra P. Saefong
Myra Saefong's Commodities Corner

Prices were stuck in a $50 trading range until the Fed sent the dollar reeling

By Myra P. Saefong, MarketWatch

SAN FRANCISCO (MarketWatch) -- The U.S. Federal Reserve gave gold the fuel it needed to restart its engine and the precious metal has already driven through the trading range barrier it's been stuck in for the past month.

old futures had been trapped in a $50 trading range between $860 and $910 an ounce on the New York Mercantile Exchange since May 28. It climbed past $920 in electronic trading Thursday evening as the U.S. dollar slumped in reaction to the Fed's failure to signal urgency to raise rates to curb inflation.
On Wednesday, the Fed decided to hold short-term interest rates steady at 2%, but sharpened its focus on inflation, saying that the risks posed to the economy by upward pressure on prices have increased. See full story.
"Gold broke decisively out of the trading range that had constrained it as investors came to realize that the Federal Reserve won't be able to begin a rate-hike campaign until 2009," said Brien Lundin, editor of Gold Newsletter.
'Buy gold! Buy silver! Buy them because they're the only defense against what's happening in all the other markets.'
— Dale Doelling, Trends In Commodities
The Fed's policy statement essentially acknowledged the "trick box" the central bank is in -- "facing growing inflationary pressures, but unable to raise rates while economic conditions are so weak and with a national election so near," he said.
That combined with growing expectations that the European central bank will begin its own rate hikes well before the Fed can act to create a bearish environment for the U.S. dollar which in turn, provided a very bullish outlook for gold, he said.
"People are finally coming out of the fog and realizing that we're in a world of hurt and people are plain scared," said Dale Doelling, chief market technician at Trends In Commodities.
"Stocks are in the toilet, the dollar is getting hammered, oil is going through the roof, food commodities are in the stratosphere [so] there's only one solution," he said. "Buy gold! Buy silver! Buy them because they're the only defense against what's happening in all the other markets."
Fed muck
The Fed's in quite a predicament as it tries to help improve the economy and most scenarios point to higher prices for gold, analysts said.
Video: Rally in gold futures
James Steel of HSBC says that record-high crude oil and dollar weakness are boosting gold prices. (June 27)
Fed Chairman Ben Bernanke is "caught between wilting growth and rising inflation," said Julian Phillips, an analyst at GoldForecaster.com. "With such toothless words against inflation, their rate-holding action told [everyone] that they can expect no interest rate support for the dollar in the foreseeable future."
"This is positive for precious metals," he said.
Gold's value as a hedge against inflation -- especially as it pertains to a weakening dollar and rising oil prices -- helped lift prices for the metal to nearly $1,034 an ounce in mid-March, the highest futures price level ever recorded.
'Inflation is a lot like toothpaste -- once it is out, it is very hard to get back into the tube.'
— David Beahm, Blanchard and Co. Inc.
And with ongoing concerns about inflation and a slowing economy, gold may be poised to return to record territory, analysts said.
"Inflation is a lot like toothpaste -- once it is out, it is very hard to get back into the tube," said David Beahm, a vice president at coin and precious metals retailer Blanchard and Co. Inc. And gold is a "tremendous hedge to both protect wealth during these inflationary periods and also generate positive investment returns when other asset classes decline in value."
The Fed's policy statement noted "two situations weighing on the economy: tight credit and the housing contraction -- that could be best addressed by an accommodative monetary stance," said Lundin. But at the same time, it noted just one, high energy prices that could be combated by a tighter monetary policy.
Crude prices climbed near a record $140 a barrel earlier this month and U.S. retail prices for regular gasoline stand near an all-time high above $4 a gallon.
"In short, they're damned if they do and damned if they don't," said Lundin. The Fed can only talk inflation down and talk the dollar up for now. "It won't be able to take any real, substantive action until after the fall elections."

Dollar doom is gold's boom
Of course, at the root of the issue for gold is the dollar, Lundin said.
"Whatever developments drive the greenback will send gold in the opposite direction," he said.
The Fed can protect the U.S. dollar by sharply increasing rates, but that would sink the economy and make servicing our huge debt loads unmanageable, said Peter Spina, an analyst at GoldSeek.com. So the Fed "must keep rates low and keep liquidity in the system, which will ultimately lead to further debasement of the dollar's value," he said.
Protection for the dollar can really only come in the form of confidence or perception and then capital controls, he said.
Spina said he senses "increasing desperation" on the Fed's part and if the economy hasn't recovered as we enter 2009, "the confidence game could unwind quickly."
The Fed is "in a corner and the U.S. dollar is going to be a victim of their policies," Spina said. "It already has been punished harshly." See full story.
No all-clear flag quite yet
Still, the market hasn't yet set out the all-clear flag for gold to move up.
August gold futures need to close above $940 before we have a technically significant breakout, said Trends In Commodities' Doelling.
Erik Gebhard, an analyst at Altavest Worldwide Trading, said the metal needs two consecutive price closes over the $920 area to "signify a lasting break to the upside."
But a break through the downside support near $864 would likely send prices below $800, he warned.
That's not impossible. If one of the central banks -- be it the European Central Bank of the Fed -- move on rates, the "currency logjam would break at that point too," said Jon Nadler, a senior analyst at Kitco Bullion Dealers.
"Or it could be that crude oil finally breaks down and comes down to reality -- either one of these events are enough to get gold down to $800 (or $770), and we better hope that bargain hunters step in at that time," he said.
Beahm admits there are quite a few things that could send gold prices below $850 -- including a strengthening economy, a slowdown in emerging markets, a rise in mining production and a fall in demand, inflation, oil prices and global tension. But he said none of those are likely.
Doelling said he'll stick with his prediction of gold above $1,350 by the year's end and silver at $25.
"I think you and I both have a better chance of winning the Lotto than metals prices have of falling at this juncture," said Doelling. End of Story

Original here