A bank teller counting Chinese currency 100 yuan notes in Beijing, May 20. (AFP File Photo)

At first sight, the announcement by the People’s Bank of China Thursday appeared bland. “With a view to establish and improve the socialist market economic system in China,“ it began. But the communiquŽ went on to outline a most unsocialist message, that Beijing was taking the first steps towards allowing the renminbi--“the people’s currency“, known as the yuan--to float freely on international foreign exchange markets. While the details of China’s new currency regime are complex, the impact of Thursday’s decision is simple.
By abandoning its fixed exchange rate, China has turned its back on one of the last pillars of its old command economy. It may have been inevitable and it may have been another step in a journey that began after Deng Xiaoping loosened the state’s economic reins in the early 1980s--encapsulated in the famous phrase of Deng’s that “it doesn’t matter whether it’s a black cat or a white cat, so long as it can catch mice“. But the announcement should not be understated for either its symbolism or its substance.
The decision to move towards a floating exchange rate was taken in a manner that has typified China’s long march towards a full market economy: cautious, pragmatic and at a time of its own choosing. In recent months, as China’s trade surplus with the US reached an eye-watering $162bn last year, the drumbeats in Washington have grown louder with demands that China’s success must be tempered. In response, Beijing has made its move, one that allows US politicians to claim a victory, but in fact leaving China’s authorities fully in control of their own destiny. It is also significant that Hong Kong retains the autonomy to be able to continue with its own distinctive exchange rate regime.
In the short term, a rise in the value of the yuan will make Chinese exports more expensive and imports to that country cheaper. If its move towards a more flexible currency regime continues--hailed by Alan Greenspan as “a first step in a number of further adjustments“--it will rebalance China’s economy away from one geared heavily towards exports, to one that produces and imports more for its domestic market. China’s awakening has been the most remarkable economic event of the past decade. Its effects can be seen everywhere, from the high price of oil to the low price of clothing. That success has lifted swathes of China’s population out of poverty. But the full fruits of that transformation have yet to filter out. A floating yuan should help accelerate that process, by making China’s consumers more wealthy and more valuable.
GUARDIAN.CO.UK

The recent Indo-American nuclear deal seems to go beyond the realm of Indo-Pakistan relations and has wider implications. Signed during Indian Prime Minister Manmohan Singh’s visit to the US, the deal virtually amounts to America’s recognition of India as a nuclear power.
The significance of the treaty was spelled out by Dr Singh when he said that it should be seen against the backdrop of India’s 1974 nuclear test and the international community’s decision to deny nuclear technology to India. The agreement would now enable India to “break out of its present isolation“, making it possible for it to get the same cooperation from America in nuclear technology as states which are members of the Nuclear Non- Proliferation Treaty without New Delhi having signed it.
America has, of course, been quick to reassure Pakistan and China that the deal was not aimed against them. Secretary of State Condoleezza Rice rang up President Pervez Musharraf to say that there was no secret deal with New Delhi and that the cooperation basically concerned Indian nuclear reactors for peaceful purposes. But, as a State Department official pointed out, the deal constituted “a significant point of departure“ from America’s foreign policy “not just in South Asia but worldwide“.
Like all international treaties signed by the US, the agreement is subject to congressional approval. It clearly expects India to divide all its facilities into nuclear and civilian categories and throw the civilian reactors open to international inspection. So far, New Delhi has agreed to place only the two Tarapur nuclear reactors and the one in Rajasthan under international inspection.
According to the accord, India will file a declaration with the International Atomic Energy Agency and open all its civilian nuclear facilities to inspection. That is the reason why the Indian opposition has criticized the agreement. Former prime minister Vajpayee has said the agreement had “long-term national security implications“ for India. He believes that separating civilian programmes from the military ones would amount to subjecting India’s civilian nuclear facilities to international inspection.
The treaty has also come under criticism in America where experts believe that by signing it the US would appear to violate the mandate of the Nuclear Suppliers’ Group. Russia and China have so far abided by the NSG. But if America goes ahead with the deal, Moscow and Beijing would be tempted to enter into similar agreements with other states which have nuclear ambitions. Anti-Iran lobbies in America also believe that the deal would allow Russia to use it as an argument for disregarding the NSG mandate and supplying nuclear fuel to Iran.
For Pakistan, there are implications it has to take into account. The difference between reactors geared to military needs and those meant for civilian purposes is thin. Any government can divert products of civilian facilities to military ones if and when it chooses to do so.
As analysts in Washington have pointed out, America should now expect a Pakistan enjoying major non-Nato ally status to press the US for a similar deal. The agreement would also enable India to purchase conventional weapons worth five billion dollars from the US.
It will also cast its shadow on the nuclear confidence-building talks due in New Delhi between Pakistan and India early next month. As the only superpower with vital stakes in South Asia, the US should follow policies that should restrain rather than encourage an arms race in the region.
DAWN.COM

Leaders at the Shanghai Cooperation Organization Summit take part in a press conference in Astana, Kazakhstan, July 5, after the end of the SCO session. (AFP File Photo)

Power balance in Central Asia is tilting toward Russia for the first time since the United States established a foothold in the region after the 9/11 terrorist attacks.
A shift in the geopolitical equations in former Soviet Central Asia has been prompted by the successful “tulip revolution“ in Kyrgyzstan in March and a bloody, if unsuccessful, Islamist-led revolt in neighbouring Uzbekistan in May. The two events awakened the region’s leaders to the dangers of their post-9/11 multi-vector policy of building strategic ties with the US while maintaining close relations with Russia.
The former Kyrgyzstan President, Askar Akayev, who was ousted in the March coup, and Uzbek President Islam Karimov, who survived the May uprising in Andizhan, blamed the West for orchestrating the turmoil in the region in an effort to install pro-Western regimes. Denying any role in the Central Asian trouble, the US vowed to press ahead with the “freedom crusade“ that had earlier brought West-oriented leaders to power in Georgia and Ukraine.
Kyrgyzstan and Uzbekistan, whose regimes came under attack this year, were the two countries that allowed the US to set up airbases in the region in 2001 for anti-Taliban operations in Afghanistan. While Kyrgyzstan had tried to balance its pro-American tilt by setting up a Russian airbase two years later, Uzbekistan demonstratively distanced itself from Russia.

Back With Russia
However, Washington’s aggressive support for “velvet revolutions“ in the former Soviet republics has pushed Central Asian states back into Russia’s embrace. During his visit to Moscow last month, President Karimov signed a defence pact under which Russia will revive military assistance to Uzbekistan and obtain the right to use Uzbekistan’s defence facilities for operations in the region. At the same time Mr. Karimov imposed restrictions on the flights of American planes from the Khanabad base, forcing the US command to redeploy some aircraft to Afghanistan.
Washington suffered an even bigger setback in Kyrgyzstan. A snap presidential election on July 10 became a triumph of traditional clan-based politics over Western-type democracy the US has been trying to export to that country. Political stability destroyed by the “tulip revolution“ was partially restored thanks to a Russia-brokered deal between the southern and northern clans. Under an election pact between two most popular politicians representing the rival clans, the former Prime Minister, Kurmambek Bakiyev, agreed, if he won the snap presidential election, to appoint his main competitor and the former Interior Minister, Felix Kulov, as Prime Minister. The tandem swept the poll and helped avoid a crippling standoff between the north and the south.
Russia and China voiced strong support for an evolutionary, rather than revolutionary, path of development for Central Asia.
On July 2 the Presidents of Russia and China, Vladimir Putin and Hu Jintao, at their summit in Moscow issued a declaration on the “World Order in the 21st Century.“ They rejected attempts to “ignore objective processes of social development of sovereign states and impose on them alien models of social and political systems.“
This approach met with grateful response in the region. Three days after the summit the leaders of Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan joined Russia and China in rejecting “attempts at monopoly and domination in international affairs.“
“Concrete models of social development cannot be exported,“ said a declaration adopted at a summit of the Shanghai Cooperation Organisation (SCO) in Astana, Kazakhstan on July 5. “The right of every people to its own path of development must be fully guaranteed.“
In a sign of the strategic reorientation of Central Asia, the Shanghai group called on the US to set a deadline for the withdrawal of its bases from the region now that the anti-terror campaign in Afghanistan is coming to an end. The SCO members also proclaimed their joint resolve to fight “terrorism, separatism and extremism on the SCO territory by their own forces.“
The SCO’s new assertiveness should be seen in the context of a call by Russia and China in their World Order Declaration for “a new security architecture“ that would promote “a just and rational world order based on the respect of the right of all countries to equal security.“
The contours of the “new security architecture“ for Asia emerged at the Astana session of the SCO with the admission of India, Iran and Pakistan as observers into the organisation. This may signal the emergence of a new centre of global power that is prepared to challenge America’s omnipotence.
HINDU.COM

Strife-weary Sudan has put behind it 21 years of civil war with John Garang, the leader of the Southern-based Sudan Peoples Liberation Movement (SPLM), being sworn in as the country’s vice-president. It was epochal in the sense that Sudan has never had a Southern or Christian vice-president in a quarter century.
In the country’s long-drawn civil war between the Muslim north and the Christian-animist south, power sharing was always at the centre of the conflict. The Muslim north had never been willing to share power with the south where most of the country’s natural resources come from. The resultant civil war led to the death of hundreds of thousands of Sudanese on both sides.
With what has happened, Sudan could be said to have entered another phase in its march as a nation-state. And there is a lesson in it for other nations that are caught up in the type of crisis that ripped Sudan apart for more than two decades. That lesson is that no war is ever resolved through the barrel of the gun but at the round table through compromises by all sides.
Garang who waged a campaign for a more equitable federal system in Sudan has paid his dues. His SPLM stood for greater autonomy for Southern Sudan in the management of its own affairs, especially the natural resources. This did not jell with Khartoum where the central government is head-quartered. The conflict that resulted from that disagreement cost the nation a lot in human and material terms.
It was for this reason that the peace accord last January was widely welcomed by international observers. Major highlights of the deal include conceding greater autonomy to the South by the el-Bashir government in Khartoum, the appointment of Garang, the SPLM leader, as vice-president and a provision for a plebiscite for total independence for Southern Sudan in the years ahead.
By Garang’s appointment, the Sudanese government has demonstrated good faith and a willingness to end the long-standing crisis in the country. We commend it and hope that it will remain resolute in abiding also by the other terms of the deal. In the end, the country may come out as a good example of how to hold a federation together.
The urgent task now before el-Bashir and Garang is to impress upon their people the need for mutual trust and co-existence. And this will be easier to do if both of them show good examples of harmonious co-operation in running the affairs of the country. Many are the challenges before them. Despite its enormous natural resources, the country remains poor, with average per capita income of less than $100. Ethnic distrust is still rife and so is the crisis in the Darfur province of Western Sudan.
To be able to tackle these problems, the country needs peace. Garang said as he took the oath of office that he would do all in his power to ensure that peace returned in all the flash-points in the country. He thinks that is one way his presence will be felt in the government. Good enough, the new power-sharing scheme vests him with some real power. With determination and sincere commitment, he, together with the President can transform Sudan and restore peace in Darfur where the Janjaweed militias are still killing innocent civilians, including women and children. In the months ahead, the world expects to see a new Sudan.
ALLAFRICA.COM

Indonesia, the world’s largest Muslim nation, has struggled to keep from fracturing along ethnic, religious and geographic lines since it gained independence from the Dutch 60 years ago. The northern province of Aceh has long been a stubborn problem, fighting a guerrilla war for independence for the last 29 years.
Now peace may be at hand. Negotiators reached a pact last weekend in Finland. It has a real chance for success, but it will take commitment from rebels and the government to turn promises in Scandinavia into reality in Southeast Asia.
The accord essentially requires the rebels in Aceh to disband and the national government to withdraw most of its troops. The rebels yielded on their demand for independence, and the government on its requirement that political parties in the upcoming provincial elections be national rather than local. The hope is that members of the separatist Free Aceh Movement will take part in the elections next year that are to be monitored by the European Union.
The formal peace agreement is supposed to be signed Aug. 15. If it sticks--an Indonesian newspaper reported soldiers shot and killed five rebels in Aceh the day the new accord was reached--it will be a tribute to Indonesian President Susilo Bambang Yudhoyono. His ingenuity in solving problems was also evident in the government’s response to the devastating tsunami in December that killed more than 125,000 in Aceh. The government suspended its law barring outsiders, allowing foreign relief workers into Aceh, and repealed emergency rule in the province.
Still, the agreement faces an uncertain future. Previous governments have failed to satisfy Aceh’s demands; in 1959, President Sukarno’s government granted the province “special territory“ status, with autonomy in religion and education. Seventeen years later, the Free Aceh Movement was founded. To dissuade the guerrillas from further violence, Yudhoyono may have to be more generous in sharing the revenue from Aceh’s oil and natural gas reserves.
It would be costly, but the price of a war would be even higher. And if the rebels’ renunciation of independence is genuine rather than tactical, the people of Indonesia, and of Aceh, will reap the benefits.
LATIMES.COM