[PEN-L:1343] Press Reports compiled by Mark Jones

[Louis Proyect <lnp3@xxxxxxxxx>]

1) JAPAN AWAKES TO THREAT OF FULL-BLOWN DEPRESSION

BY GRAHAM SEARJEANT FINANCIAL EDITOR JAPAN faces a renewed threat that its
economy will fall into a full-scale depression if the August collapse in
world share markets is not reversed.

A 9 per cent fall in the Nikkei 225 share index last week is calculated by
local analysts to have created £10 billion of unrealised stock losses among
Japan's already shaky top banks. If sustained, these losses will undermine
the banks' ability to deal with their mountain of bad debts. They will also
negate plans by the new Government of Keizo Obuchi to restore faith in the
banking system, stop the slide in credit and stimulate the world's second-
biggest economy back to growth.

The world will watch with anxiety this morning to see how Tokyo reacts to
the further fall in share prices suffered in New York and London on Friday
after Japan's markets had closed for the weekend.

Meanwhile, the Hong Kong Futures Exchange will introduce new rules today to
try to curb speculation against the Hong Kong dollar.

On Friday, a 3.5 per cent fall in share prices pushed Tokyo's Nikkei index
down through all previous lows seen in a bear market that has already
lasted more than eight years. Since the index fell from its peak of 38,915
at the end of 1989 to a low of 14,309 in August 1992, it has yo-yoed
between 14,500 and 20,000.

Friday's 498-point fall took the Nikkei down to 13,915, the lowest level at
which it has traded since March 1996. At that time the FTSE 100 index, its
British equivalent, stood at about 1,600, less than a third of its latest,
recently depleted closing rate of 5,249.

Falling share prices in Tokyo are likely to prove far more damaging than
setbacks in Europe and North America, where shares had previously stood at
record highs.

In Japan, share values have far more significance for the financial system.
Most big companies have big trade investments in other quoted companies.
Analysts at Daiwa Securities expect losses on shares to overwhelm half-year
profits of groups such as Shiseido, Nippon Steel, Nissan Motor and
Marubeni, unless the recent fall is reversed in the next few weeks. In the
past, falling share prices have also affected housing and construction.
These are already weak points of the economy, responsible for many of the
banks' losses.

Falling share prices have already created a vicious circle in which the
impact of past falls on bank balance sheets and corporate profits pushes
shares down even further.

One government minister has already ruled out a big official programme to
support the stock market. In the face of heavy foreign selling, however,
traders are hoping that public sector investment funds will buy shares this
week.

Even before the collapse of Russia's finances, the West saw a revival in
Japan as the only hope of rescuing the Asian "tiger" economies from the
consequences of the financial woes that first struck them a year ago.
Instead, further falls in share prices in Tokyo are likely to make those
woes worse.  #2 Ethnic cataclysm looms in Congo


2) MAELSTROM OF WAR THREATENS TO SUCK IN MUCH OF AFRICA AND SPEW OUT FRESH
GENOCIDAL HORRORS

Monday August 31, 1998

President Laurent Kabila of Congo has lit the touch paper of a fire for
which all of Africa will pay. The war in former Zaire now involves five
other countries directly, and at least five indirectly. But even more
serious is Mr Kabila's appeal to the crudest of ethnic politics. It
threatens a new genocide dwarfing in horror the 1994 pogroms that killed a
million people in Rwanda, mostly from the Tutsi minority.

Last week Mr Kabila called on Congolese to take up bows and arrows,
machetes and spears to kill Tutsis, "otherwise they will make us their
slaves." It was an echo of the radio broadcasts in Rwanda that incited the
genocide four years ago. In Congo's capital, Kinshasa, people from the west
African states of Senegal and Mali, whose features sometimes resemble the
stereotype of tall, thin Tutsis, have sought protection in their embassies,
while in the city's slums, mobs including children have gone on hunts for
Tutsis which have ended over beaten or burned bodies.

This is the ethnic politics that gave the continent the epic horrors of
apartheid in South Africa, Idi Amin's regime in Uganda, Unita's 20-year war
in Angola, the Biafra secession war in Nigeria and the rotting of regimes
such as Daniel arap Moi's in Kenya and Mobutu Sese Seko's in Zaire.

Only four African political movements have stood out against tribalism:
those of the former president Julius Nyerere in Tanzania; the guerrilla
armies led by Yoweri Museveni in Uganda and Paul Kagame in Rwanda; and the
African National Congress in South Africa.

Mr Kabila's 15 months in power foundered once he had surrounded himself
with government, military and police leaders almost entirely from his own
area - Katanga - ignoring the political organisations that had battled
against Mobutu's authoritarianism through the Sovereign National Conference
of 1990-96.

Mr Kabila's ministers of home affairs, justice, mining and transport, the
central bank governor, the police inspector-general, the national security
director and the armed forces chief are all Katangese - and include Mr
Kabila's son and cousin.

"From Belgian colonial times the road to Katanga has been the road to
unfreedom," wrote Professor Ernest Wamba dia Wamba, a leader of the Congo
Democracy Movement. The organisation, which grew out of the National
Conference, groups 20 parties and leads the new rebellion in east Congo.

And Mr Kabila has created a regional crisis. He has turned against the
leaders whose armies helped him take power from the dying Mobutu and
trained his own army: President Museveni of Uganda and Vice-President
Kagame of Rwanda.

Both countries have sent units to lawless eastern Congo on joint operations
with Congolese troops against gangs of former Mobutu soldiers, the fighters
who took part in the genocide in Rwanda, and the Ugandan rebels from Amin's
era, who have been destabilising north-west Rwanda and western Uganda.

Last month Mr Kabila requested that a crack unit of the Rwandan army be
stationed in Kinshasa. When this was refused, he angrily demanded that all
Rwandans leave Congo, and launched his propaganda war against Tutsis.

But before this rift emerged, Mr Kabila prepared an insurance policy for
himself. He secretly trained in Katanga 10,000 of the Rwandan militia who
took part in the genocide, and opened links with the Sudanese who back the
Ugandan dissidents. With these two groups Mr Kabila was ready to take up
Mobutu's old alliances, undermine his former allies and, he believed,
consolidate Katangese power. It was a security threat that Rwanda and
Uganda could not afford to take lightly.

But Mr Kabila had reckoned without the multi-ethnic Congolese army troops
in the east, most of whom promptly changed sides too, and announced they
would join the rebellion against him.

South Kivu, where the population are Tutsis, is the centre of this
rebellion, as it was of the one that brought Mr Kabila to power.

In the vast area of North and South Kivu, Tutsis have never been granted
citizenship. In a repeat of their rebellion three years ago, they are
fighting for a Congo that will grant them equal rights. The Congo Democracy
Movement is multi-ethnic and promises to end tribal politics and the
arbitrary rule that has characterised Mr Kabila's leadership.

Mr Kabila, known to many senior African officials as "the historical
accident", short-circuited the Congolese opposition groups' long political
march towards democracy. He took no part in the National Conference, where
civil society evolved slowly as demands were discussed and formulas for
transitional government hammered out. The instant embrace he won from
Western governments and business repeated their behaviour after that other
short-circuit of democracy in this region - Milton Obote's stolen election
of December 1980. It took a six-year guerrilla war for Uganda to overcome
its legacy.

The past month's upheaval in eastern Congo, and the rebels' attempt to take
it to the west - with the seizure of the main air force base at Kitona and
the dam at Inga - would probably have succeeded without the intervention of
Angola and its heavy artillery and air strikes.

That the Angolans moved so decisively had little to do with Mr Kabila. They
were motivated by the opportunity to hit across their border at their own
dissident movements: Unita, which has given up all pretence of being part
of the United Nations-monitored peace process; and Flec, the separatist
movement in the oil province of Cabinda, surrounded by Congo.

As the jigsaw of alliances fractured in and around Congo, former Mobutu
generals and their followers have seized the chance to move out of their
safe havens, including refugee camps in Tanzania and the Central African
Republic, to join the side they thought most likely to win - initially the
rebels. This meant the Angolans saw the rebels as a threat, for many of
these generals have been in close alliance with Jonas Savimbi and Unita.
Angolan officers justify their intervention by claiming that Unita soldiers
are fighting alongside the rebels, though this has been repeatedly denied
by the rebel leadership.

The shifting alliances of tens of thousands of Mobutu supporters and
Rwandan militias from the former regime, willing to join any army that can
bring them back to power, is well illustrated in neighbouring
Congo-Brazzaville. There they fought on both sides of the brief war that
brought Denis Sassou-Nguesso back to the presidency two years ago. An
Angolan intervention, also triggered by the desire to cut off covert
support to Unita, gave Mr Sassou-Nguesso victory.

But in Congo - unlike in tiny, oil-rich Congo-Brazzaville - instability is
endemic and only the Congolese can end the fighting.

The intervention of Zimbabwe and Namibia alongside Angola to save Mr Kabila
reflects a tragic misunderstanding of the situation and an acceptance of Mr
Kabila's inflammatory ethnic rhetoric.

The internal consequences for both countries are likely to be serious.
Zimbabwe faces widespread social unrest and cannot afford to spend at least
£60,000 a day on the war.

And last week Namibia's high commissioner to Britain, Ben Ulenga, resigned,
partly citing his disagreement with Namibia's military adventure. Mr Ulenga
was the leader of Namibia's trade unions during opposition to apartheid
South Africa's occupation, but even with that old power base behind him it
was an astonishing gesture in a country just as monolithic in its political
system as Zimbabwe.

Mr Ulenga has been swamped with messages of congratulation.

One of the few encouraging gestures of the past week came when Tanzania's
President Ben Mkapa had his military training team airlifted out of Congo
by South Africa. President Nelson Mandela has tried in vain to use his
moral authority in the region to achieve a ceasefire. With Tanzania, South
Africa sees only too clearly the ethnic horror that this war threatens.


3) OUTRAGE IN INDIA AS POISONED COOKING OIL KILLS SLUM DWELLERS

By Suzanne Goldenberg in New Delhi Monday August 31, 1998

Health inspectors fanned out across the Indian capital at the weekend,
braving mobs of angry grocers who continue to sell the tainted cooking oil
that has killed two dozen people in the last fortnight.

Officials say 23 Delhi people have died of dropsy - and some 1,000 fallen
ill - since the first contaminated mustard oil was discovered in August.

The disease, which causes swelling of the limbs and breathing and heart
problems, is caused by a toxin in the oil of Argemone mexicane (prickly
poppy), a local weed.

The press puts the toll at 30, and prints daily tallies of the hundreds of
new cases. This has added to the panic in a country where middle class
consumers are only slowly awakening to their rights, and becoming less
tolerant of unsafe manufacturing.

Six other Indian states at the weekend banned the sale of the
strong-tasting mustard oil, which is traditional in the cooking of West
Bengal and other parts of eastern India. However, it is also popular among
the poor because it is cheaper than sunflower or corn oil.

Most of the victims are in Delhi's slums, as are the grocers raided at the
weekend. However, the traders remain unrepentant, arguing, with some
evidence, that they bought the cooking oil in good faith from reputed
manufacturers. Besides, the recall of mustard oil has forced prices up by
six rupees a litre to 54 rupees (80p) and they stand to make a profit by
selling the banned substance.

Delhi state government officials blame the dropsy epidemic on the greed of
unscrupulous manufacturers and dealers who mixed poisonous substances into
the oil, and then sold it.

At the weekend, the government ordered the arrest of 13 such traders. It
hopes to file complaints today against the directors of seven edible oil
manufacturers, including state-owned firms.

Although it was uncertain at first how such widespread contamination
occurred, police last week said the poisoning was deliberate. They say oil
makers and government inspectors colluded to get the lethal product
approved for sale.

Such practices are not uncommon in India, but the scale of the epidemic and
the evidence that government inspectors took a share of the profit has
caused outrage.

 © Copyright Guardian Media Group plc.1998


4) FOOD RIOTS RIFE IN INDONESIA

By John Aglionby in Jakarta Monday August 31, 1998

Indonesia yesterday witnessed its sixth consecutive day of widespread
unrest, sparked by popular desperation after recent massive price increases.

Analysts are predicting further violence because there is no end in sight
to the country's economic crisis and people are dissatisfied with the
failure of President B. J. Habibie to control prices since he took over
from the autocratic Suharto as Indonesia's leader in May.

In several towns across Java soldiers have been ordered to shoot to kill
after mobs of starving people attacked and burned rice mills, plantations
and shops. In North Sumatra, troops shot one man dead on Wednesday.

A sizeable proportion of the rioters are women and children in search of
rice, flour, cooking oil and other essentials.

Many of those looting mills, shops and warehouses say that their daily wage
will no longer buy one kilogram (2.2lbs) of rice. In the past few weeks the
price of the country's staple has almost doubled, to sell at 5,000 rupiahs
(30 pence) a kilogram, only 300 rupiahs less than the daily minimum wage.

More than 40 per cent of Indonesians are living in poverty, earning less
than the minimum wage, and it is predicted this figure will rise to more
than 50 per cent by next year.

Major-General Joko Subroto, the military commander in east Java, the area
worst hit by the popular disturbances, said troops had been told to shoot
rioters if warnings to disperse went unheeded, "because the looters are
becoming more and more reckless and brutal".

Police commanders said the unrest was "purely criminal", but many observers
believe the food crisis is now so acute nationwide anarchy may not be
preventable.

Thailand, Vietnam and Taiwan promised last month to send more than 1.2
million tonnes of rice to Indonesia as soft loans, but all three deals have
fallen through.

An agriculture expert, Thoby Mutis, said yesterday that the crisis is
unlikely to be resolved soon because "there are insufficient supplies, the
distribution system is not functioning and so many government officials
stink of corruption".

He said that until May, distribution was controlled by ethnic Chinese, "but
now there is a vacuum because most Chinese fled in the riots and have not
been replaced".

One Western financier said the government would find it very expensive to
buy rice from overseas. "Everyone knows Indonesia is desperate and so they
are jacking the prices up. But Habibie has little choice if he does not
want the whole country to erupt."

--- from list leninist-international@xxxxxxxxxxxxxxxxxxx ---


Louis Proyect

(http://www.panix.com/~lnp3/marxism.html)