Archive for the ‘International Trade’ Category

South East Asia vary of Chinese nationalism and a return of the Maritime Silk Road

September 22, 2014

The Chinese vision of a Maritime Silk Road is based on the seven great voyages of Admiral Zheng He in the time of the the Yongle Emperor (1360 – 1424), the third Emperor of the Ming dynasty.

The admiral of all seven fleets was Zheng He, the great-grandson of a Mongol warrior. His original name was Ma Ho, the Chinese version of Muhammad, for his father was a Muslim who had made the pilgrimage to Makkah. In 1404, the emperor conferred on him the honorific Zheng, and he was appointed Grand Eunuch, thenceforth to be known as Zheng He. ….

From the point of view of geographical discovery, the Ming voyages must rank as the earliest state-sponsored effort to seek out new lands, markets and spheres of political influence. That the same idea occurred to the rulers of both the Far East and the “Far West” almost simultaneously is intriguing, and it shows that—long before the emergence of a “global economy” in the late 20th century—East and West were responding to the same rhythms of political and economic change.

Zheng He 7 voyages - National Geographic

Zheng He 7 voyages – National Geographic

The reestablishment of the Chinese Maritime Silk Road is said to be a pet project of President Xi Jinping who is a scholar of Chinese maritime history and an admirer of Admiral Zheng He. Even before the Ming dynasty there was extensive maritime and cultural commerce between South India and China during the Song and Yuan dynasties. But the maritime routes withered after Zheng He and left the area open for the Potuguese in the 16th century and later for the French, Dutch and the British who followed. The Maritime Silk Road was among the items to be discussed by President Xi with Narendra Modi on his recent visit to India.

New Delhi is abuzz with speculation that President Xi Jinping could raise the issue of Maritime Silk Road (MSR) during his visit to India this week and explore business, investments and trade opportunities for China in India. At least three reasons can be identified to uphold the above assumption; first, the issue of MSR was raised during President Hamid Ansari’s visit to China in July this year and the Indian side had indicated that New Delhi would examine the idea. The Chinese would be keen for a response from the Indian side and India may push for the BCIM (Bangladesh, China, India and Myanmar) corridor to which it has offered wholehearted support and it serves the interests of all the partners.

The second reason is that the MSR is a pet project of the Chinese President and is believed to have been driven by his knowledge of ancient Chinese cultural and trade connections with the outside world. Apparently, between 1985 and 2002, Xi had personally taken interest in the Quanzhou Maritime Museum, and according to the curator, Xi had perused through the ancient historical records, artifacts and exhibits at the museum and may have ‘learnt a lot about China’s maritime history’ which could have been the driver for his interest in MSR. Xi even secured substantial government grants for the museum. Incidentally, Quanzhou is home to several ancient shrines and temples built by Tamil communities who had established trading contacts with the Chinese during the Song (960-1279) and Yuan (1279-1368) periods. Given his knowledge of ancient maritime trade and cultural connections between India and China, Xi may recall the cultural and Buddhist connections between the two countries. It is pertinent to mention that China has committed US $1 million for the Nalanda University.

While India is not averse to some parts of the Maritime Silk Road being reestablished, others – and especially Vietnam – are very suspicious of Chinese intentions.

Maritime Silk Route

Maritime Silk Route

Most countries have maritime disputes with China in the South China Sea, but also see a threat to liberty, security and maritime safety at sea.

The restoration of “Silk Road on the Sea” is both an ancient ambition of the leaders in Beijing, and a symbol of Chinese nationalism. So it hides a lot under what seems beneficial to the surrounding neighbors of China. The essence of Chinese intentions in the idea of ​​building “new silk road” at sea are:

Firstly , create a new order in which coastal neighbors follow a trajectory operated and dominated by the Chinese. The “Silk Road on the Sea” is part of the  “string of pearls” master plan to transform China into a maritime power and compete with American superpower.

Secondly , “Silk Road on the Sea” is a diplomatic tool to execute foreign policy with China’s neighbors. Through the use of “Silk Road on the Sea”, the Chinese are trying to create a soft image, useful for the rise and expansion of its influence.

Thirdly , “Silk Road on the Sea” provides an opportunity for China to promote its policy of “setting aside dispute and pursuing joint development” so as to exploit marine resources in the region, especially energy resources of oil and gas. 

Fourth , the initiative “Silk Road on the Sea” is to further the territorial claims on islands by China. Successful implementation of the initiative “Silk Road on the Sea” will create conditions favorable for the presence of the Chinese coast guard  especially the South China Sea, the Strait Malacca, Indian Ocean, and help to expand Chinese maritime influence and enhance the influence of its military on the sea. … As with ancient Zheng He’s voyage the objective is “to establish and enforce sovereignty “over the Paracels and Spratlys (of Vietnam). To justify its claims to sovereignty. China will continue to use the “Silk Road on the Sea” for aggressive actions in the South China Sea make the situation hotter and more physical.

Fifth , China will use initiative “Silk Road on the Sea” to implement a divide and rule policy of the neighboring countries. There may be the possibility that some countries will be attracted to the immediate economic benefits, are willing to overlook the problem rules and norms of international law to support the initiative “Silk Road of the Sea ​​”of China that will harm the interests of the country which has sovereignty disputes with China over some island. On the other hand, this does not exclude the possibility that China will increase the pressure and aggression with countries that do not support the initiative “Silk Road on the Sea”.

Sixth , the initiative “Silk Road on the Sea” also aims to push the United States and the Western countries out of the area. This initiative is important in order for the policy to “rebalancing strategy in Asia – Pacific region” of America. On the economic front, “Silk Road on the Sea” is to fight Agreement Trans-Pacific economy (TPP) of the United States. Thus, one can see “Silk Road on the Sea” China will make competition between the United States and China increasingly fierce.

Once the “Silk Road on the Sea” is formed China will set out new rules to force other countries to comply; China will act unilaterally ignore international law. The actual situation in the South China Sea has proven time over this. Seen from this perspective, the “Silk Road on the Sea” is not only a threat to the security and territorial sovereignty of neighboring countries, especially countries with maritime disputes with China in the South East, but also a threat to freedom, security and safety of navigation at sea.

China has officially put the materials to build the concept of “Silk Road on the sea at a meeting of Senior Officials (SOM) ASEAN – China. ASEAN countries have not yet responded. …..

For Vietnam, the initiative “Silk Road on the Sea” is a challenge to the sovereignty of the islands of Vietnam just as Zheng’s ships in ancient times were used as an argument concerning the sovereignty of archipelagos Sa and Truong Sa of Vietnam.

But Malaysia, while still vary, is tempted by the possibilities of development on the relatively under-developed East coast in Kuantan.

More than 600 years ago, the legendary Ming Dynasty diplomat Admiral Zheng He made seven epic journeys to the West via a route known as the maritime Silk Road.

First used in the Qin and Han Dynasties (AD 25-220), the nautical passageway connected the ports of south China to Southeast Asia, India, Arabia and Africa. Silk, china, tea and spices exchanged hands from Guangzhou, the starting point, to the countries around the Gulf. 

Now, China is proposing to rebuild this centuries-old seaway into a 21st century maritime Silk Road. Kuantan, on the east coast of Peninsular Malaysia, is hoping that modern day Chinese vessels will share Zheng’s assessment when he landed here in the 15th century: that this city facing the South China Sea is an ideal gateway to the region and beyond.

Located 250 kilometers from the capital city of Kuala Lumpur, Kuantan is the east coast’s economic hub and its most modern city; although by no means as cosmopolitan as its west coast sisters. The capital of the state of Pahang is being developed into an integrated logistics and industrial hub for the East Coast Economic Region (ECER), a major project by the Malaysian government to decentralize economic activities.

Crucially, it provides fast access to China through its namesake port. The multipurpose, deep-sea port serves the resource-rich hinterland of the east coast and is a leading petrochemical hub port and container terminal for that part of the peninsula.

Chasing losses for Corporate tax planning

September 2, 2011

Loss making companies have acquired a new value in M & A activity, especially if they have accumulated losses which can be carried forward against future profits.  In some countries carry-forward losses are as high as 25% of GDP.

Shifting profits to tax havens has been used by corporates (and individuals) increasingly since the 1970’s, but shifting losses to high-taxed countries can be just as effective. A new report has just been issued by the OECD, Corporate Loss Utilisation through Aggressive Tax PlanningISBN Number: 9789264119215, Publication Date: 12/08/2011, Pages: 92

An OECD press release  states:

30/08/2011Due to the recent financial and economic crisis, global corporate losses have increased significantly. Numbers at stake are vast, with loss carry-forwards as high as 25% of GDP in some countries. Though most of these claims are justified, some corporations find loop-holes and use ‘aggressive tax planning’ to avoid taxes in ways that are not within the spirit of the law.  

This aggressive tax planning is a source of increasing concern for many countries and they have developed various strategies to deal with it. Working cooperatively, countries can deter, detect and respond to aggressive tax planning while at the same time ensuring certainty and predictability for compliant taxpayers.

.. countries have identified financial instruments that create artificial losses or obtain multiple deductions for the same loss. They have also seen loss-making companies acquired solely to be merged with profit-making companies and loss-making financial assets artificially allocated to high-tax jurisdictions through non arm’s length transactions.

Reuters reports that

The OECD report, which singled out one industry — financial services — said banks headquartered in high-tax countries were buying and selling derivatives among operating subsidiaries in low-tax jurisdictions and then shifting losses to higher-tax jurisdictions to “manage large loss-making financial assets” held on their balance sheets.

Martin Sullivan, an economist at Tax Analysts, a trade publication, said he thought the majority of the loss-shifting described in the report “pertains to banks, since they are the ones that had huge losses in 2008 and now are making profits.”

The tax-boosting principle at work centers on loss carry-forwards, a legal accounting technique that allows corporations to apply their current year’s net operating losses to profits in future years. While the move is designed in part to help companies avert bankruptcy, it also allows them to reduce their tax bills. ..

The OECD report identified what it called three high-risk schemes designed to maximize the tax value of carry-forward losses. They are:

  • Corporate reorganizations, in particular those in which profitable companies buy money-losing companies solely for the tax benefits of their losses, which is illegal in the United States.
  • Certain financial instruments, including currency swaps and schemes that “refresh” soon-to-expire losses.
  • Non-arm’s-length transfer pricing, or the prices companies charge between subsidiaries for goods and services. This is not legal in the United States and is a subject of growing scrutiny by the Internal Revenue Service.

Indian exports up 82% as focus shifts to new markets in Africa and S. America

August 12, 2011

Financial turbulence in India’s traditional markets in Europe and the US have threatened to limit  development. Even though domestic consumption has increased significantly in the last decade the Indian economy is still very dependent upon exports. There has been a shift of emphasis in the last few years as India has tried to emulate China and develop new markets in Africa and South America.

Although exports had contracted for 13 straight months beginning November 2008, India rebounded from the crisis quickly, logging an unprecedented 37.6% growth in 2010-11 on the back of incentives and a push into new markets in Latin America and Africa.

July exports surged nearly 82% from a year ago to $29.3 billion while imports grew 51.5% to $40.4 billion, trade data released on Thursday showed. 

Exports of engineering goods, which now account for as much as 30% of the export basket, to Latin America increased four-fold during April to July. The IT industry too intensified exports to the region while the pharmaceutical industry found huge demand for its generics in Brazil and Mexico.

This strategy targeting Latin America and Africa has its limits since in absolute terms the US and EU still account for a third of the country’s exports and a large portion of India’s imports. Any decline in exports to these regions will create a balance of payments problem. In April-July 2011, imports grew 40% to $151 billion, expanding the trade deficit to $42.7 billion. In July alone, the trade deficit was $11 billion.

Fortunately the 2011 monsoon looks like being  close to an “average monsoon” which should keep domestic demand buoyant. But the best long-term demand hedge for India will be in differentiating from Chinese products and increasing exports to China. Imports from China are growing fast and to get trade with China into a more healthy balance will also reduce the balance of payment risks.

From the Hindu Business Line (which is by far the most balanced and reliable financial newspaper in India):


Exports in July grew by an astonishing 81.8 per cent to $29.3 billion, according to provisional data released by the Commerce Secretary, Dr Rahul Khullar, on Thursday.

The drivers of this growth – the fastest since April 1995, according to Bloomberg – were sectors such as engineering, petroleum products, readymade garments, gems and jewellery. The strategy to diversify to new markets in Asia, Africa and Latin America has helped in maintaining high growth rates.

Dr Khullar, however, told reporters that the growth rates will definitely slowdown from August due to a demand contraction in traditional markets such as the US and Europe. He said the increase in interest cost is hurting small and medium exporters, adding that, “I am trying to get something done on that front”. …..

Since consumers in the US and Europe — owing to lower income and fear of job losses — are likely to switch over to cheaper products, exporters adapting quickly to cater such a demand will survive, Dr Khullar said. He added that the country is “better prepared” to face any slowdown than it was in 2008 during the global financial crisis.

Dr Khullar said that monthly exports are likely to fall to less than $25 billion, which would make it tough to achieve a figure of $300 billion for the entire fiscal. In 2010-11, India’s merchandise exports were valued at a record $246 billion. …… 

Meanwhile, imports in July rose 51.5 per cent to $40.4 billion. Trade deficit (gap between imports and exports) in July widened to $11.1 billion, up from $7.7 billion in June and $8.9 billion in April 2011. It had touched a $15 billion–high in May.

Dr Khullar said the high level of trade deficit continues to be a worry, adding that it could be over $130 billion for this fiscal. Trade deficit during April-July 2011 is already $42.7 billion.

Exports during April-July 2011 jumped 54 per cent to $108.3 billion, while imports during this period increased 40 per cent to $151 billion.

Engineering exports were $8.7 billion in July alone and $31.6 billion during April-July 2011 due to a huge increase in such shipments to Africa and Latin America. Thanks to high oil prices, shipments of petroleum products also rose. They were worth $4.6 billion in July and $18.6 billion in April-July, an increase of 60 per cent.

Mr Khullar said exports of most sectors have shown huge growth due to the ‘lag effect’ as these were the orders that Indian exporters received months before the recent crisis in US and Europe, tsunami in Japan, huge inflation in China and a robust growth in Latin America.

Chinese trade surplus at a record high as US downgrade threatens their holdings

August 10, 2011
National emblem of the People's Republic of China

Image via Wikipedia

The Chinese economy is not immune to whatever craziness is going on around the world. They hold such a large amount of US treasury bonds that the gridlock and political irresponsibility in Washington is leading to some fundamental policy changes regarding their reserve holdings. The People’s Bank of China owns about $1.1 trillion of US Treasury bonds out of the  $1.5-trillion treasury bonds or so of foreign treasuries that it holds amid China’s total reserves of about $3.2 trillion.

It is not therefore surprising then that China is among those most concerned by Standard & Poor’s recent downgrade of the United States’ AAA credit rating. It was sufficiently concerned to publicly chastise the US for its irresponsibility!

“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” reported the Xinhua news agency.


BEIJING, Aug. 10 (Xinhua) — China Wednesday reported faster than expected growth in exports, imports and trade surplus in July, but analysts said the picture would become worse in the coming months amid a faltering global economy.

The trade surplus rose sharply to a record high of 31.48 billion U.S. dollars in July from June’s 22.27 billion U.S. dollars and the 28.7 million U.S. dollars in the same period a year ago, the General Administration of Customs (GAC) said on its website.

July exports rose 20.4 percent year-on-year to reach 175.128 billion U.S. dollars, a record monthly high compared with 17.9 percent in June. Imports quickened from June’s 19.3 percent to 22.9 percent to 143.64 billion U.S. dollars.

The robust readings suggests both China’s competitiveness in exports and domestic demand are in relatively good shape, Bank of America-Merrill Lynch economist Lu Ting said in an email to clients.

Exports to the EU and Japan rose to 22.3 percent and 27.2 percent year-on-year in July from 11.4 percent and 20 percent in June.

And exports to the United States expanded 9.5 percent, down slightly from 9.8 percent in June, but down significantly from 13.3 percent in the second quarter and 21.4 percent in the first quarter, which indicated weakness in the U.S. economy has been weighing on its imports from China, according to Lu. ….

On Wednesday morning, yuan hit a record high of 6.4167 against the U.S. dollar.

US politicians in the Administration and those grand-standing in Congress will need to get their act in order if they are to avoid the day when the Chinese are no longer around to buy their debt. As it is, China is now engaged in diversifying its foreign reserves away from US dollars to other currencies and even other asset classes and is under severe internal pressure to accelerate this diversification.

Piracy increasing off the West African coast

July 24, 2011

AFP reports that another Italian tanker has been seized by pirates off the coast of Benin.  It remains inexplicable to me in this world of satellite navigation and GPS and Rapid Reaction Forces and instant news that piracy can still not only continue but actually flourish.  

Why do I wonder if the insurance industries actually come out of this with increased profits??

AFP: Cotonou -Pirates seized an Italian tanker with a crew of 23 off Benin in the Gulf of Guinea Sunday, the Benin navy said. Navy commander Maxime Ahoyo told AFP that after receiving distress signals from the vessel, the navy sent two patrol boats in pursuit of the pirates. “We are closely monitoring the situation,” he added.

Three pirates managed to board the ship 23 nautical miles south of Cotonou (AFP/Graphic)

Earlier, the Italian news agency ANSA first reported the capture of the Rbd Anema e Core and its crew comprising 20 Filipino seamen, two Italians and a Romanian captain. It said three pirates managed to board the ship, which was carrying fuel, 23 nautical miles south of Cotonou, the economic capital of Benin. Italy’s foreign ministry said its crisis unit was in touch with the Naples-based shipowner and following the situation closely.

Italy stepped up its measures against piracy earlier in July, clearing commercial ships sailing through dangerous waters to use private security guards or soldiers for protection. It is not clear whether the Rbd Anema e Core was carrying armed guards. Pirates have seized several Italian boats over the last few years. Earlier this month, a Greek oil tanker hijacked by gunmen off the coast of Nigeria was released along with its 20-strong crew. The Liberian-flagged oil tanker Aegean Star owned by Endeavour Marine Agency was returning to the Ghanaian port of Tema. On April 21 Somali pirates captured an Italian cargo ship headed for Iran with 21 crew members on board, including six Italians, in the Arabian Sea near Oman. In February, pirates wielding rocket-launchers seized a large Italian oil tanker with a crew of five Italians and 17 Indians east off the Yemeni island of Socotra in the Indian Ocean.


Beijing turns the screw on rare earth materials

February 18, 2011
Wen Jiabao (温家宝), Chinese Premier

Wen Jiabao: Image via Wikipedia

The Chinese Government is taking steps to keep control of the development, production and export of rare earth materials under state corporations.  Until production from alternate sources in Vietnam, Afghanistan, India, Sweden and other countries are ramped up, production and export of rare earth materials is likely to be used as an instrument of Chinese foreign policy. This leaves Japan particularly vulnerable and is likely to speed up the Japanes investment in the production of these materials in other countries.

Asahi reports:

CHONGQING, China–In a move likely to strain already scarce supplies of rare earth materials worldwide, China will introduce new controls on production and export of the elements crucial for electronics and environmental technologies.

According to the state-run Xinhua News Agency, Chinese Premier Wen Jiabao instructed a State Council standing committee meeting Wednesday to designate rare earth materials as an important strategic resource, and implement measures to strengthen government control over the materials.

With many players fighting over the largely unregulated market, from state corporations to small firms, Beijing, worried about smuggling and rampant environmental destruction, has decided to step in. Beijing plans to grant authority to develop and manage rare earths to state corporations to allow better oversight and control.

The state will also decide export volumes each year after assessing domestic demand and price trends in global markets. Watchers have said the measures are primarily designed to allow Beijing to use its control over the materials as a strategic diplomatic tool.

China has already taken steps to further its control over rare earths production this year, by designating Jiangxi province a nationally administered mining district for rare earths. Under the arrangement, natural deposits will be monitored by Beijing, and exploration and mining will be conducted under close control by the government.

Related: China and the use of rare earth elements trade as a tool for diplomacy

Indian MMRCA decision in two weeks – Eurofighter Typhoon still leads

February 13, 2011

A decision on the winner of the $10 billion Indian MMRCA deal for 126 fighters could be announced in two weeks and the contract signed by September. But in the normal way of these things I expect that a number of the losing contractors will object to whoever is chosen and some of the objections may well be in Court. There is no large Government contract placed in India without allegations of biased and “fixed” evaluations by the losers. But eventually the number of decisions overturned by such objections is very few. Whoever is called for negotiations when the winner is announced is 95% certain of being awarded the contract.

Eurofighter take-off: image

The word on the street is that the 4-nation European consortium’s Eurofighter Typhoon still leads after the commercial and strategic evaluation having already won the technical evaluation . But all the offset proposals put forward by the contractors may not have been fully evaluated yet. It would seem that technical considerations for one ( Lockheed Martin’s F-16IN Super Viper) and strategic considerations for the other ( Boeing’s F/A-18 Super Hornet) may disallow the choice of the US fighters. The Saab JAS 39 Gripen is probably running second.

But there may yet be a surprise.

Business Standard reports:

Electrifying aerospace vendors at Aero India 2011 in Bangalore, Indian Air Force chief, Air Chief Marshall PV Naik, announced today that New Delhi would decide within two weeks about which medium multi-role combat aircraft (MMRCA) it would buy, and actually sign the US $10 billion contract by September.

A panoramic view of Aero India 2011: image Broadsword (

“The CNC (Cost Negotiation Committee) is likely to start in a week or two. Taking that as the datum and giving [the CNC] another 6-8 months, the contract is likely to be signed in September”, declared Naik.
The CNC is a group of officials that negotiates, between the Ministry of Defence and the winning vendor, a final price for the sale.
Naik’s boss, defence minister AK Antony, had stated at Aero India 2011 yesterday that the globally-watched contract would be finalised by the end of the next financial year 2011-2012, i.e. by March 2012. By setting the deadline six months earlier, Naik appears to have put the MoD under pressure.
Asked for a clarification by Business Standard, Naik’s officiating deputy, Air Marshall RK Sharma, confirmed his chief’s announcement. Sharma clarified that the winning vendor would be issued an invitation within two weeks to appear for cost negotiations, while the CNC would actually meet within two months. An invitation to a vendor to appear in a CNC is tantamount to announcing the winner of a contract.
“The DAC (the MoD’s apex Defence Acquisition Council) will formalise the winner soon; we will then invite that company for negotiations”, said Sharma.
Six fighters are competing for the IAF contract: Boeing’s F/A-18 Super Hornet; Lockheed Martin’s F-16IN Super Viper; the MiG Corporation’s MiG-35; Saab’s Gripen NG; Dassault’s Rafale; and a four-nation European consortium’s Eurofighter. Executives from these companies say they are baffled by Naik’s announcement. Asked in late-2010 to rework their offset bids, and with no date yet given for resubmission, the MoD does not have a key element needed to decide a winner.
“Is the MoD going to decide the contract winner without examining the offset bids?” asks a bemused executive, from one of the competing aircraft manufacturers.

The air chief also voiced his apprehension that the contract could be delayed by “dissatisfied vendors (who) put a spoke in the wheel”, using allegations of wrongdoing to trigger long-running probes by investigation agencies.
Yesterday, a defensive Antony had announced that political considerations would play no role in deciding the winner. That seemed to suggest that the Cabinet Committee on Security (CCS), which will be required to approval the contract after the CNC negotiates a final price, would merely rubber-stamp the IAF/MoD decision.
Other than the impending contract for 126 medium fighters to boost the IAF’s dwindling numbers, the IAF chief also announced the impending conclusion, “within this financial year”, of the contract to upgrade the air force’s 20-year-old fleet of 52 Mirage-2000 medium fighters. This upgrade, which has been the subject of bitter negotiations between the IAF and French contractor, Thales, will give the Mirage-2000 another 20 years of service life by fitting on a new radar and a modern cockpit with state-of-the-art avionics and electronic warfare equipment.
While Thales had initially demanded US $52 million per aircraft, the deal has been concluded, say IAF sources to Business Standard, at US 39 million per aircraft.

Surprise! Lockerbie bomber release orchestrated by Tony Blair’s gov’t in exchange for trade deals

February 1, 2011
Tony Blair

Tony Blair: Image via Wikipedia

Apparently Tony Blair and his government were more than mere US poodles. That Blair was an accomplished liar regarding his “sexed up” Iraq dossiers has become apparent. But that he had (has) little sense of ethics and could treat with the Devil for the sake of trade deals has always been suspected but is coming out clearly now.

British ministers secretly advised Libya on securing the successful early release of the Lockerbie bomber and demonstrate that Tony Blair’s Government was “playing false” over the issue.

If corruption is taken to be “having or showing a willingness to act dishonestly in return for money” it is not difficult to attach a label to Tony Blair and his government.

The Telegraph:

A Foreign Office minister sent Libyan officials detailed legal advice on how to use Abdelbaset al-Megrahi’s cancer diagnosis to ensure he was released from a Scottish prison on compassionate grounds, documents obtained by the Daily Telegraph show.

The Duke of York is also said to have played a behind-the-scenes role in encouraging the terrorist’s release.

The Scottish First Minister said the revelations confirm that while his administration acted according to its public pronouncements on the affair, Tony Blair’s Government was behaving duplicitously.

“The cables … show that the former UK Government were playing false on the issue, with a different public position from their private one,” said a statement released by Mr Salmond’s office.

Downing Street maintained at the time that is was not complicit in the release of al-Megrahi, and that the decision to free the convicted terrorist was taken by the Scottish Executive alone.

The Libyans closely followed the advice which led to the controversial release of Megrahi – who was convicted of the murder of 270 passengers on Pan Am Flight 103 – within months of the Foreign Office’s secret intervention.

According to American officials, Mr Blair was suspected of securing trade deals after agreeing to include Megrahi in the agreement.

After Megrahi was released in August 2009, another American document records Colonel Muammar Gaddafi’s comments – which suggest that Prince Andrew, the UK’s trade envoy, may have played a role. The document records: “He [Gaddafi] went on to thank his ‘friend Brown’, the British Prime Minister, his government, Queen Elizabeth, and Prince Andrew, who ‘against all odds encouraged this brave decision’. [Gaddafi] noted that the UK efforts would positively affect ‘exchange’ between the two countries.

Read more.

Davos 2011 wraps up: Emerging markets generating the emerging buyers

January 30, 2011

Davos 2011 wraps up somewhat overshadowed by the ongoing revolution in Egypt.

Davos, home of the annual World Economic Forum meeting

Davos, home of the annual World Economic Forum meeting : image The Telegraph


But the WEF is turning out to be more than just a talking shop. This year there is no single dominating theme but a number of strong themes were apparent. The Euro is turning the corner, buyers from the emerging markets are on an acquisitions spree and bankers are being rehabilitated after they brought the world to its knees with their greed and profligacy.

There is a clear optimism but also a strong fear of being optimistic. Too many fingers have been burnt.

  1. Emerging market companies buy up the world
  2. Bankers regain power as Davos summit ends with a big fudge
  3. Davos summit leaves David Cameron and George Osborne feeling bruised
  4. Euro zone crisis seen turning corner
  5. At Davos, men outnumber women by over 5 to 1
  6. Sarkozy publicly slams JPMorgan chief at Davos forum


DAVOS 2011 kicks-off today: 35 heads of state, 2500 delegates

January 26, 2011


35 heads of state and over 2,500 delegates are expected to attend.

If the WEF’s guidelines are followed there will be at least one woman for every four men!!

The WEF Chinese delegation will total over 60 people this year and the Indian will again be significant with 130 delegates. India will be launching an India Inclusive campaign to stress the benefits of economic progress and the growth of a vibrant middle-class and average incomes, while minimising the political impact of increasing disparities in wealth, as the new entrepreneurs of India globalise their operations – Tata, Ambanis, Mittals, Mahindra, Bhartis, Godrejs are all names we are becoming increasingly familiar with on a world stage. Chinese participation is up fivefold in the last decade, Indian up fourfold.
The G20 is very well represented too. All countries have president/prime minister or ministerial representation here except Argentina, with the latter’s central banker as its representative.

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