Opec pushes output to record level

Opec pushes output to record level

By Carola Hoyos and Javier Blas in London

Published: August 12 2008 18:21 | Last updated: August 12 2008 18:21

Opec last month pushed its production to the highest level in its 48-year history even as demand was slipping in the US and Europe, the International Energy Agency (IEA) said on Tuesday.

The combination of surplus supply and weaker demand has pushed oil prices to $113.50 a barrel, down 24 per cent in the past month and the lowest level since late April.

The effort was led by Saudi Arabia, which had come under increasing pressure for doing too little to compensate for lower supplies from countries outside Opec, where growth has been lacklustre as fields have aged in countries such as the UK and Mexico.

In mid-June, as oil inventories were running low, King Abdullah called a high-level international meeting in Jeddah and pledged to help reduce record prices by increasing Saudi production from 9.4m barrels a day to 9.7m b/d, the highest level in 30 years.

The market brushed aside the pledge, sceptical of whether the kingdom would make good on its promise and instead worried about supply outages in Nigeria. The oil price steadily climbed from just below $140 a barrel on the day of the meeting to $147.27 in July.

Tuesday’s preliminary data of Saudi shipments proved sceptics were both right and wrong. According to the IEA, Saudi Arabia did increase its production but not to the degree promised. In July, despite Saudi officials worrying about the impact the slowing economy and high petrol prices were already having on US driving habits, Saudi Arabia increased its output to 9.55m b/d, up 100,000, Tuesday’s report said.

The Saudi increase, which could still prove to have been more generous as new shipping data are collected, coupled with higher volumes from Iran, helped push the 13-member group’s total output to 32.8m barrels a day and the oil price to $114 a barrel.

Opec’s output in July was about 1m b/d higher than in April and significantly higher than the 31.1m b/d in the same month of last year.

Whether Saudi Arabia and Opec will continue to work to reduce prices, or revert to keeping supplies off the market now that prices have fallen, will become clearer at the cartel’s next meeting on September 9 in Vienna.

Opec’s production increase was not the only reason oil prices fell; demand curtailed by economic slowdown and high oil prices had also played a critical role, the IEA said.

The IEA cut its global oil demand growth to 790,000 barrels a day, down from July’s estimate of 890,000 b/d. Some of the demand in rich countries will be lost for ever, it noted, saying: “Even if retail prices ease, it seems unlikely that motorists who have purchased smaller cars will revert to gas-guzzling vehicles.”

But demand growth in emerging countries remained strong, with Chinese consumption rising above 8m b/d for the first time in June, hitting 8.3m b/d.

The market is split about the direction of crude oil prices, but the previous general bullish sentiment is cracking.

The IEA called it “too early to cite definitively a sea change in the market”.

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ECB official warns of ‘protracted weakness’

By Ralph Atkins in Frankfurt

Published: August 13 2008 02:19 | Last updated: August 13 2008 02:19

Eurozone growth could hit a period of “protracted weakness,” a senior European Central Bank official warned on Tuesday in the latest sign that the bank has abandoned hopes of any significant rebound later this year.

The comments by Lorenzo Bini Smaghi, ECB executive board member, in an Italian newspaper, came ahead of Thursday’s eurozone growth figures, which are widely expected to show that gross domestic product contracted in the second quarter.

Recent economic data have shown the 15-country region being hit badly by the effects of sharply higher oil prices on global growth, on top of the fall-out from the US subprime mortgage crisis. Germany’s prospects have appeared to deteriorate particularly rapidly.

After last week’s interest rate setting meeting, Jean-Claude Trichet, ECB president, warned that eurozone growth in the second and third quarters would prove “particularly weak”. Significantly, he did not repeat his earlier forecast of a subsequent “progressive return to on-going moderate growth”. In a clear hint that the ECB would revise significantly its outlook, Mr Trichet said he preferred to await fresh ECB forecasts, due for release next month.

But Mr Bini Smaghi told Il Messaggero newspaper that “many indicators point to a worsening in growth expectations. There are many risks, which we flagged in the past, and which are partly materialising. We could see a phase of protracted weakness in coming quarters.”

He cited the impact of energy costs on purchasing power as one factor causing growth to slow more rapidly than expected. The recovery would depend partly on external factors, such as oil prices and the US economy, he added.

His remarks amounted to “the strongest warning to date that the euro area faces a bleak outlook for activity in the months ahead,” said Julian Callow at Barclays Capital.

Still, the ECB seems a long way off contemplating cuts in interest rates. Eurozone inflation is at a record high of 4.1 per cent and Mr Bini Smaghi warned that with the first signs of a slowdown productivity fell and unit costs would rise. “This translates into more persistent inflation. This is the reason why one cannot lower one’s guard in fighting inflation.”

Separately, Axel Weber, Germany’s Bundesbank president, told a German newspaper that the ECB had to keep fighting to ensure current levels of inflation did not become entrenched. He was also relatively upbeat about German economic prospects.

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Saakashvili’s grip on power in doubt

By Roman Olearchyk in Tbilisi and Isabel Gorst in Moscow

Published: August 12 2008 20:02 | Last updated: August 12 2008 20:02

Georgia’s pro-western president Mikheil Saakashvili is a gambling man of sorts, notorious for betting high in Tbilisi’s passionate and cut-throat politics – and usually winning. But by pitting his country’s tiny army against mighty Russia, he may have taken one gamble too far.

Thousands of Georgians flooded on to the streets of Tbilisi on Tuesday to demonstrate their support for the president, in the face of Russian calls for his resignation. They held posters saying “We love you Misha,” the diminutive of Mikheil by which Mr Saakashvili is universally known.

However, Sergei Lavrov, the Russian foreign minister, made no bones about Moscow’s attitude: “Our position is that Mr Saakashvili cannot be our partner, and the best thing would be if he left office. I don’t think Russia will be in a mood to conduct negotiations or even talk with Mikheil Saakashvili.”

The fact that Russia hates him so much is a big factor in Mr Saakashvili’s favour in Georgia, but the outcome of the conflict could severely weaken his five-year domination of Georgian politics. If he is blamed for precipitating the Russian onslaught, Georgians could turn against him. What is far less certain is whether any alternative leader would be more accommodating to Moscow.

“Maybe the Russians should, indeed, topple him,” said Bella, a middle-aged Georgian woman distraught at this week’s devastation.

An international lawyer educated in Ukraine and the US, Mr Saakashvili was swept to power in Georgia after the pro-democracy Rose Revolution in 2003. In a whirlwind of change, backed by a team of youthful and passionately pro-western supporters, he revived Georgia’s moribund economy with liberal reforms. But his pro-western policy infuriated Moscow, and his hard line against the secessionists in Abkhazia and South Ossetia aggravated those conflicts.

Many poorer citizens missed out on the new wealth, and many former bureaucrats lost their jobs. Last year a broad opposition coalition accused him of monopolising power and aggravating relations with Moscow. For them, the final blow came late last year, when the president turned riot police on demonstrators.

Vulnerable, Mr Saakashvili gambled, called snap presidential elections for January, and won a fresh mandate with 53 per cent of the vote. A key tranche of his platform was a vow to lead Georgia into Nato, and restore the territorial integrity of the country.

Even if he survives, his ratings could dive. While Mr Saakashvili has nearly five more years on his term, he could step down or be removed by a snap vote, or possibly by another revolution. Anything seems possible in today’s Georgia.

Two potential challengers for Mr Saakashvili’s job – Levan Gachechiladze and Nino Burjanadze – stressed that while at war, Georgians should remain united against Russia.

Mr Gachechiladze, a former presidential contender and fierce critic of Mr Saakashvili’s autocratic style, said: “What happened with Georgia, from the Georgian side, is 100 per cent the responsibility of Saakashvili. When you know Russia is ready to do such things, [you should] try everything to prevent it.” Ms Burjanadze, a former president of the parliament, who was Mr Saakashvili’s close confidant, although she quit his election list last January, is considered to be a more likely figure to succeed him.

She was very cautious in a brief interview, saying: “I may proceed in forming my own political party sooner than expected. We need new political ideas.”

While the Russians like to paint Mr Saakashvili as the western puppet responsible for the conflict, she said: “What Russia did was not against Mr Saakashvili, but against the Georgian nation. It was punishment for Georgia’s decision to adopt western values.”

If Moscow wants regime change, any alternative to Mr Saakashvili is likely to be just as pro-western and suspicious of Russia.

The leadership contenders

Nino Burjanadze 44, a veteran of Georgian politics, served in the administration of Eduard Shevardnadze, who became president of Georgia in 1995. Ms Burjanadze later turned against Mr Shevardnadze, joining Mikheil Saakashvili in the pro-democracy movement. She served as speaker of parliament for much of his presidency. She supports Tbilisi’s strong stance against Russia and is pro-Nato and EU integration.

Despite being an ally of Mr Saakashvili, Ms Burjanadze is seen as a future opponent who has her eyes on the presidency.

Levan Gachechiladze, 44, a businessman, was until recently a big player in Georgia’s wine business. He served as aide to Mr Saakashvili when he was mayor of Tbilisi, and supported his rise to power through the “Rose Revolution”.

But he later turned against him, accusing the president of straining relations with Russia.

Mr Gachechiladze stood in presidential elections in January aiming to oust Mr Saakashvili and turn Georgia’s government from presidential system to a parliamentary one. His hopes faded after Mr Saakashvili won a fresh mandate.

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Egypt resolves project dispute

By Heba Saleh in Cairo

Published: August 13 2008 04:11 | Last updated: August 13 2008 04:11

Agrium, the Canadian fertiliser producer, has settled its dispute with Egypt over the cancellation of a $1.4bn project by the company to build a nitrogen plant on the country’s Mediterranean coast.

The project, named EAgrium, had been awarded all the relevant permits but was scrapped after local people protested fearing its impact on the environment.

The case, followed closely by foreign investors and international banks, has been seen as a test of Egypt’s resolve to maintain a business friendly atmosphere conducive to foreign investment.

Under the agreement, state-owned MISR Oil Processing Company will acquire the EAgrium project through a share swap. EAgrium shareholders will get a 26 per cent stake of the combined entity.

Agrium will not be required to contribute any fresh equity to the project beyond the $280m it had already committed to the cancelled venture. MOPCO will arrange a $1.1bn project financing facility to fund an expansion in production.

“The relatively quick resolution of the dispute should send a signal, from a regulatory and political risk standpoint, that foreign investment environment in Egypt is still favourable,” said EFG-Hermes, the Egypt-based private investment bank.

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Georgia gets the jitters as Russia outlines its requirements
12.08.2008 Source: Pravda.Ru URL: http://english.pravda.ru/hotspots/conflicts/106080-georgia_russia-0

Presidents of Russia and France, Dmitry Medvedev and Nicolas Sarkozy, have come to an agreement on the regulation of the conflict in South Ossetia. The agreement is based on six principles, Interfax reports.

Medvedev described the six principles during a joint press conference with his French counterpart.

“The first principle – not to use force. The second – to definitively stop all military actions. The third – to provide free access to humanitarian aid. The fourth – Georgia’s armed forces must return to the places of their permanent deployment. The fifth – Russia’s armed forces will be withdrawn to the positions preceding the beginning of the military actions. The sixth – the start of the international discussion of issues of the future status of South Ossetia and Abkhazia by means of guaranteeing their solid security,” Medveded said.

When asked why Russia decided to halt military actions in S. Ossetia today, Medvedev said: “The operation, which the Russian forces were conducting, has brought its results. That is why we have ended it.”

“It was supposed to be done today, not yesterday or tomorrow. We herewith made a temporal decision to cease fire until the problem is entirely solved within the framework of the principles which we have just named,” the Russian president said.

Dmitry Medvedev strongly refuted statements from the Georgian administration which said that Georgia had ceased fire in the conflict zone two days ago.

“As for the affirmation of the Georgian president, who said that Georgia ceased fire in the conflict zone two days ago – these are lies.” Medvedev said. “The Georgian forces were shelling peacemakers. Unfortunately, there were victims yesterday. In other words, there was no cease fire with Georgia,” he added.

“This is what differs those hell-raisers from normal people: it is very hard to stop them when they smell blood,” Medvedev said.

Russia ’s Foreign Minister, Sergei Lavrov, emphasized that the Georgian troops must return to their barracks.

“All the rest will have no point without this condition. South Ossetian residents will hardly understand that they can return and restore their homes without this condition. If Georgia does not accept this condition, we will be forced to take other measures not to let the current situation, which has been formed as a result of Georgia’s aggression, repeat itself. This is the absolute condition for everything else,” Lavrov said.

“The fact that the president of France has completely agreed with that is important. We hope that the president of France will inform the Georgian administration of these principles,” the Russian foreign minister said.

In the meantime, Georgian President Mikhail Saakashvili goes into a tail-spin as he senses Russia’s anger. He announced Tuesday that Georgia was going to pull out from the Commonwealth of Independent States, a post-Soviet organization which unites nearly all ex-Soviet republics. Saakashvili made the announcement on a meeting in front of the building of the Georgian parliament in the center of Tbilisi.

“We are bidding final farewell to the Soviet Union. The USSR will never come back here. We urge Ukraine and other members of the CIS to leave the organization which Russia administers,” ITAR-TASS quoted the Georgian president as saying.

In addition, Saakashvili stated that he declared the Russian troops in Abkhazia and South Ossetia occupation troops.

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Western media blatantly misinterpret conflict in South Ossetia
12.08.2008 Source: Pravda.Ru URL: http://english.pravda.ru/world/ussr/106079-western_media_ossetia-0

Western media have been paying a lot of attention to the situation with South Ossetia recently. Their opinion is especially important for Russia as a country directly involved in the conflict. The position of the Western media mirrors the public opinion in the West. US and British media outlets lay the entire blame for the conflict on Russia and Ossetian “separatists”, whereas German and Italian publications tend to take a more reasonable stance in their reports.

German experts see the reason of the current standoff in Mikhail Saakashvili’s stay at power. It is an open secret that Saakashvili’s prime goal in politics is to restore Georgia’s territorial integrity.

The majority of Western experts believe that if Saakashvili had agreed to return Georgia under Moscow’s guardianship, the Kremlin would have most likely declined its protectorate over South Ossetia and Abkhazia. However, Saakashvili intends to take Georgia to NATO and make it a country of oil and gas transit bypassing Russia.

The New York Times wrote that the reason of the conflict lies in provocations (bombardments) on the border. According to the logic of US analysts, it was the “separatists” who started the attacks first, whereas Saakashvili was innocent.

British observers from The Independent see the reason of the current bloodshed in Georgia’s wish to end tedious talks and start real actions instead.

Western journalists believe that Moscow simply used the fact of South Ossetian residents holding Russian passports as a pretext for the military interference. Some Russophobic publications even wrote that Russia considers the region the stronghold to reinstate its power on the territory of the former Soviet Union.

The New York Times wrote that Saakashvili stood up against Russia’s predominant role in the region.

The Times believes that the friction between Russia and Georgia intensified in April when Vladimir Putin decided to strengthen economic ties with South Ossetia and Abkhazia. US journalists were very concerned about the fact that Russia sent its fighter jets to patrol the S. Ossetian territory during Condoleezza Rice’s visit to Georgia.

The Wall Street Journal published slanderous information in an article shadowing Russian peacemakers in South Ossetia. The paper wrote that the Russian peacemakers were supposedly persecuting ethnic Georgians, making them vote at separatist elections. The newspaper also believes that Russia has chosen this way to take revenge on the West and to finally annex the two enclaves.

Foreign journalists have to acknowledge that Saakashvili has created an external enemy with his attack on S. Ossetia.

Unlike other Western publications, Italy’s La Repubblica does not declare South Ossetia a separatist state and tries to analyze arguments from both sides.

Latvia ’s Chas reminded that the conflict started after Georgia’s aggressive attack on Ossetian positions at night of August 2. The newspaper wrote that the conflict of 1989-1992 unfolded according to the same scenario. Latvian analysts believe that several Western countries and Ukraine destabilized the situation with their arms shipments to Georgia, which subsequently led to Saakashvili’s decision to attack Ossetia.

Many Western journalists think that the current conflict can also be described as a conflict between Russia and the West. German experts from Frankfurter Rundschau analyzed the roots of the Georgian-Ossetian standoff. They wrote that the conflict originally appeared during the Soviet times. When Georgia declared independence in 1991, Ossetia asked for its own authority. Georgia responded with an attack. Almost 2,000 people were killed in the war that lasted for 18 months. South Ossetia has been seeking Russia’s support since then, the newspaper wrote.

Die Welt wrote that many common Germans consider the events in South Ossetia a game that the USA launched on the threshold of the Beijing Olympics. German people refer to Saakashvili as an American servant. The majority of Germans support Russia’s actions in the standoff, the newspaper wrote.

German readers believe that George W. Bush can not cancel his plans to encircle Russia and to keep the USA’s status of the only superpower on the globe. The Germans urge the world to turn its back to the USA.

The Economist wrote that Saakashvili does not have the reputation of an immaculate politician in Europe. The defeat of the Georgian opposition in November 2007 struck a serious blow on the international image of Georgia.

The Wall Street Journal continues its journalistic insanity by claiming that it would be impossible to end the conflict without the interference of the West. The West has to do something to stop Russia’s aggression against the Western ally, the newspaper wrote.

The Washington Post wrote that the West can not maintain aloofness at this point because Georgia, as a staunch US ally, may eventually undermine USA’s prestige.

Sergei Balmasov
Pravda.ru

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Indian Origin of Egyptian Civilization
12.08.2008 Source: Pravda.Ru URL: http://english.pravda.ru/science/earth/106074-Indian_Origin_Egyptian_Civiliza-0

By Babu G. Ranganathan

The ancient Egyptians in their writings described that they had come "from the south, from a land across the Great Sea", a land which they called "Punt". Some have said "Punt" refers to ancient Somalia but this cannot be for several reasons. Somalia is not separated from Africa by a great sea and the description of the animals and plants given by the ancient Egyptians concerning the land of Punt match exactly with that of the southwestern coast of India (known as Malabar).

There is, in fact, considerable archaeological and anthropological evidence that ancient India was the source of ancient Egyptian civilization. The ancient black Indians, known as "Dravidians", (who in ancient times were also known by the Greeks and Egyptians as "Ethiopians") built and laid out ancient Egyptian civilization and, no doubt, in the process also mixed with their black brethren in Africa. The ancient Egyptians, themselves, admitted in their writings that they received their civilization and culture from the Ethiopians, another black "race".

In ancient times there were known to be two types of Ethiopians, Western Ethiopians, in Africa, (who were black with wooly hair and fine features) and their brethren, the Eastern Ethiopians, of India, who also were black with fine features but possessed straight hair. Both Western and Eastern Ethiopians were descended from the biblical Cush, one of the sons of Ham. The Dravidians most likely emigrated from Africa to India and, later, many returned to Africa where they developed ancient Egyptian culture and civilization. An excellent website offering substantial scholarship and historical documentation and evidence that ancient India was the source of Egypt's ancient culture and civilization is "India and Egypt" (http://www.hinduwisdom.info/India_and_Egypt.htm).

Before the Aryans (a Caucasian race who were barbaric and illiterate) invaded India, India was composed mainly of various black "races" (the Dravidians, the Veddoids, also known as Australoids, and the Negrito proples) who built the ancient Indus Valley civilization, one of the world's four earliest cradles of civilization. Today, the majority of India's population is a mixture of both Indo-Aryan and Dravidian with pure Aryans mainly in the extreme North and pure Dravidians mainly in the extreme South. The Veddoids mainly live in the hill regions of India and the Negritos mainly live off coast in the Andaman and Nicobar islands.

India contributed tremendously to Western civilization. Many don't realize that Western mathematics originated in India. The so-called "Arabic" numerals were borrowed by the Arabs from the Indians. Because the Europeans borrowed their mathematics from the Arabs they became known as Arabic numerals, but they originated in India. Without the decimal system that India created and which was borrowed by the West, via the Arabs, Western science and technology would not have been possible. The ancient Roman numerals would not have sufficed. The Arabs borrowed much of their sciences and mathematics from India and transmitted them to the West. More and more textbooks on mathematics now are mentioning India as the original source of Western mathematics.

Today Egypt is referred to as an Arab nation, but this is only because the Arabs conquered Egypt centuries ago and imposed upon the original people their Arab language, culture and Moslem religion. Many modern Egyptians of today are really the descendants of Arab, Persian, Greek, and other non-African peoples that entered into Egypt over the many centuries. The ancient or original Egyptians, however, were of African or Black (Negroid) descent, and this is still mostly true of the bulk of Egypt's rural population, especially in the south. Long before the Arabs invaded and conquered Egypt the famous and ancient Greek historian Herodotus (who is known as the Father of History) visited Egypt and wrote concerning the Egyptians: "They have burnt skin, flat noses, thick lips, and wooly hair" (Herodotus, Book II, p. 100, translated by George Rawlinson, New York: Tudor, 1928). Readers may wish to obtain the book "Return To Glory" (http://truthcentric.com/). The book, written by white author and professional speaker Joel F. Freeman, discusses the historical and archaeological evidences for ancient black Egyptian civilization.

It is often asked how all the varieties of humans could have descended Adam and Eve and, particularly, from Noah's three sons Ham, Shem, and Japheth. Obviously, Noah and his three sons Ham, Shem, and Japeth each carried the genes for producing several races since ultimately all the races of mankind had descended from them. Genetically, it was possible for Noah and his three sons to carry the genes for producing different races just as it is genetically possible today, for example, for a person of European origin to carry genes for producing children with different color hair. The principle is the same. Although you and I today may not possess genes for producing different races of people, Noah and his three sons Ham, Shem, and Japeth did possess such genes.

Contrary to popular belief by some, black skin is not a curse. Ham (which means "black") was given that name by his father Noah before there was any curse pronounced by Noah. Furthermore, Noah had never cursed Ham himself but, rather, Ham's son Canaan. And even that curse wasn't eternal or perpetual because the Bible tells us that a curse lasts for only a few generations. A more comprehensive treatment of this subject may be found in my article "Negro Slavery and The Myth of Ham's Curse" at www.religionscience.com.

Black skin protects from the harmful effects of ultraviolet light. In fact, all human skin color is brown. The skin pigment that gives color to all skin is melanin which is brown. Whites have the least amount of melanin in their skin and that's why they appear "white". Only albinos (those born with no melanin because of genetic defect and mutation) are purely white and in most dander from harmful effects of the Sun's rays. Instead of black skin being a "curse" it is a healthful blessing for those living in year round hot climates.

We are all from the same parents, created equally in God's image, and in Christ equally His children and whatever we possess and whatever good and progress any in the human race have done or accomplished is by the Creator's undeserving free grace, for His rightful glory and for our benefit and the benefit of others.

The author, Babu G. Ranganathan, has his B.A. with concentrations in theology and biology and has been recognized for his writings on religion and science in the 24th edition of Marquis "Who's Who In The East". The author's website may be accessed at www.religionscience.com .

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The message from Moscow: Resurgent Russia bids to establish a new status quo

By Charles Clover

Published: August 12 2008 20:04 | Last updated: August 12 2008 20:04

The stretch of highway on Tuesday between Georgia’s capital of Tbilisi and the city of Gori, close to the front lines, told the unhappy story of a once-proud army’s demise.

Dozens of vehicles lay stranded, seemingly abandoned as panic gripped the retreating Georgian soldiers during the night. Equipment, including machine guns, was left in the vehicles and strewn along the road. There were few signs of fighting. Only one vehicle had been hit by enemy fire: an armoured personnel carrier was twisted and blackened, its turret tossed into a nearby field.

The rest of the destruction – two heavy trucks that had crashed into each other head-on, several tanks run into ditches and abandoned, tens of trucks askew in the road, doors swinging – was caused by elemental fear. The soldiers riding in them evidently knew that any military vehicle on the road was fair game for the dreaded Russian aviatsia. Walking back to Tbilisi was preferable to death.

It was the humiliating end of a spectacularly ill-conceived military adventure by Mikheil Saakashvili, Georgia’s president. He fed the panic on Tuesday by announcing on television – falsely, it turned out – that Russian troops were marching on the capital and ordered all his units to retreat.

When Dmitry Medvedev, Russia’s president, announced the cessation of hostilities on Tuesday, Russia was in command of both South Ossetia and Abkhazia, had destroyed the Georgian military’s ability to fight and seemed intent on ousting Mr Saakashvili, with a fair chance of success.

The week saw unprecedented risk-taking by both the Georgian and Russian governments, each seeking to rewrite the rules on what they could get away with. Mr Saakashvili gambled on an offensive against the breakaway enclave of South Ossetia but, instead of a quick and surgical strike, it turned into a botched and bloody mess on Thursday night as Georgian troops laid siege to the town of Tskhinvali, bombarding it and killing as many as 2,000 – though Georgia claims Russia was to blame for part of this carnage.

The Kremlin also took a gamble when it sent the 58th army across the border to attack an American-backed state. Even the USSR’s invasions of Hungary, Czechoslovakia and Afghanistan, the only precedents for such a war, were launched against countries solidly within Moscow’s sphere of influence. Georgia is different: its pro-western government has close links to Washington, a Harvard-educated president and more than 100 US military advisers. In terms of brazen disregard for the global status quo, the operation has few parallels.

But while Georgia gambled and lost, Russia’s calculations seem, so far, to have succeeded.

In attacking an American ally that was being considered for Nato membership – and getting away with it – the Kremlin has demonstrated that Russia is the dominant power in its region. “Historically Russia was and will remain the guarantor of security for the peoples of the Caucasus,” said Mr Medvedev last week.

It appears that Russia suddenly belongs to the elite club of countries that can write their own rules. Just as the US was able to ignore widespread criticism of its invasion of Iraq on a false pretext – Saddam Hussein’s phantom weapons of mass destruction – Russia’s leaders have been able to ignore international pressure over a war that they themselves helped to provoke by arming and supporting the South Ossetian rebels.

“Russia is claiming a whole new role, and it will have repercussions everywhere,” says Dmitri Trenin, a political analyst at the Carnegie Moscow Center think-tank, identifying the recent decisions by Nato to begin membership discussions with Ukraine and Georgia, as well as US plans for an anti-missile system based in eastern Europe, as the key provocations. “Russia will start taking on the US around the world more actively. This attitude wasn’t there a month ago – we’re in a different environment now. Russia wants to assert regional hegemony.”

Few doubt that Georgia is the first in a series of moves to re-establish Moscow’s control over the former Soviet Union. Nato membership for Georgia or Ukraine, actively considered earlier this year, is now highly unlikely.

Having established the precedent of defending Russian citizens by the use of military force – South Ossetians have been issued with Russian passports for two years – the Kremlin could put the same divide-and-rule techniques to use in Crimea, the province of Ukraine that is dominated by ethnic Russians, in ethnically Russian northern Kazakhstan, or in Baltic states with large Russian minorities. It will almost certainly seek to remove Mr Saakashvili, viewed in Moscow as an American stooge, and replace him with a pro-Russian figure. Viktor Yushchenko, the pro-western president of Ukraine, will take note.

The Kremlin has recently sought to confront Washington elsewhere, building links with anti-US regimes such as Hugo Chávez’s Venezuela and Raúl Castro’s Cuba, while deepening its relationship with China as a counterweight to Nato. The two countries signed a milestone border demarcation agreement last month.

In the face of this, American pressure on Russia has been ineffective. Moscow seems to have gauged correctly that Washington would not react to its invasion of Georgia – tied down as it is by two ongoing wars in Afghanistan and Iraq. It is not clear that the “consequences” threatened by Dick Cheney, US vice-president, will ever come to pass.

Many believe the Georgian government is also at fault in the war for attacking South Ossetia first. “I think the US is embarrassed by Saakashvili going beyond what the US thought was wise policy. Saakashvili tried to put them in front of a fait accompli. But his operation was a disaster,” says Mr Trenin. The European response to the Georgia crisis has been nuanced and critical of Georgia as well as of Russia, showing a widening gap between American perceptions of Russia and those of Europeans, who oppose the confrontational US policies and prefer not to antagonise Moscow.

“A lot of people in Europe will be telling the Americans: ‘We have been saying you can’t trust this Georgian government, they are like kids playing in a sandbox with matches and they got burned very badly. There is no sense in going to war with Russia over this,’” says Mr Trenin.

Natalia Leshchenko of Global Insight, a think-tank, says: “The EU members are of two minds about what position the EU should take towards Russia in the situation. The new members, the Baltic states and Poland, were quick to issue a demand to impose harder visa regulations on Russia and also suspend talks on the Partnership and Co-operation Agreement [between Russia and the European Union], which is still not in place. The older members of the EU, in the meantime, see little point in the suspension of dialogue with Russia.”

In other words, Moscow has achieved a stunning military victory, at a surprisingly low cost to its international position. “The US is in a position of losing an ally and there is nothing they can do, unless the Russians commit some blunder like large-scale bombing of Tbilisi or sending ground troops against Gori,” says Mr Trenin, referring to the Georgian city south of South Ossetia. “Then the US would have a justification to act. But as it stands they do not.”

Such brazenness would have been unthinkable only a few years ago, following the collapse of the Soviet Union. But Russia has undergone a startling transformation over the past eight years under Vladimir Putin, who stepped down earlier this year as president to become prime minister. The pro-western liberalism of the 1990s has been discredited and the symbols the government uses to define itself are increasingly those of empire – the orthodox cross of Tsarist imperial Russia and the Red Star of the Soviet Union. “Patriotism” abounds as a loosely defined state ideology, nurtured in an increasingly state-controlled media.

In the 1990s, the Kremlin was far more vulnerable to international pressure, beholden to international creditors and eager to be included in “the west”, with all the moral obligations that such a commitment entails. Now, Russia is economically self-reliant, with the third-largest foreign currency reserves in the world and a huge trade surplus fuelled by oil and gas.

Meanwhile, the country’s relationship with the west has become more ambivalent, with many in Russia believing – like the 19th century Slavophile movement that flourished in the salons of imperial St Petersburg – that Russia has a special mission of its own and need not emulate the west.

There has also been a transformation in the Russian military under Mr Putin, who began his presidency at the nadir of Russia’s warmaking capabilities: the disastrous accidental sinking of the submarine, Kursk, in 2000 as a result of a malfunctioning torpedo. The Kursk catastrophe showed how severe the neglect of the military had become, and the Kremlin has since made the army a priority. A few years ago, an invasion of Georgia would simply have been a practical impossibility for an army crippled and demoralised by the agonising campaigns in Chechnya and lack of funds.

The true cost to Russia’s military of the Georgian campaign is not known, but it appeared to be a textbook example of modern warfare. “The Russians are clearly using the model of the US campaign in Yugoslavia in 1999,” says Mr Trenin. The Kremlin used high-altitude bombing to hammer the Georgian military into withdrawing, much as the US Air Force did to force the Serbs out of Kosovo.

Russia is clearly hoping that handing Mr Saakashvili a major military defeat will turn public opinion decisively against him and that the Georgian people will do the rest of the work in ousting him. Sergei Lavrov, Russia’s foreign minister, said on Tuesday that Russia was not actively trying to overthrow Mr Saakashvili, as the Georgian president alleged publicly in a recent television interview, but would like to see him resign. “It would be best if he left,” Mr Lavrov told a news conference, “We have no trust in the current Georgian leadership.”

Georgians, who initially rallied around Mr Saakashvili and are still united in their hatred for Moscow, are increasingly questioning their president’s judgment. Although 150,000 cheered the president outside Georgia’s parliament on Tuesday, grumbling can be heard everywhere. “Why did we go to war without weapons? Why did we go to war without anti-aircraft systems? Who needed this war?” said Timur Goldelashvili, a resident of the town of Gori, on Tuesday.

Only hours after the Russian ceasefire came into effect, there were widespread Georgian media reports that Nino Burjanadze, a former prime minister who recently fell out with Mr Saakashvili, was hinting that she intended to challenge him.

“This is not the time to make political attacks ... with Russian tanks only a few kilometres from our capital,” she said. “There will be time for determining responsibility and guilt later on.”

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Bank of England clears way for rate cuts

By Peter Garnham

Published: August 13 2008 11:20 | Last updated: August 13 2008 11:20

The pound plummeted to its lowest level in 21 months against the dollar on Wednesday after the Bank of England delivered a gloomy assessment of the UK economy and opened the way for interest rate cuts.

In its quarterly inflation report, the Bank said the outlook for UK growth was “noticeably weaker” and that second quarter GDP estimates were likely to be revised lower.

Mervyn King, governor of the Bank of England, warned the coming year was going to be difficult and that there was “bound to be a quarter or two” of economic contraction.

It was the Bank’s comments on inflation that really moved the currency markets, however.

The Bank said it expected consumer price inflation to remain elevated, rising to 5 per cent in the coming months, but said it believed it would fall below its 2 per-cent target level in two years’ time.

This prediction was well below forecasts, prompting futures markets to move aggressively to bring forward the timing of cuts in UK interest rates, which currently stand at 5 per cent, and currency traders to sell the pound.

Analysts said the Bank of England, which has been reluctant to cut interest rates due to rising inflationary pressure, had effectively signalled an an easing monetary policy bias.

David Bloom at HSBC said following policy shifts that have seen New Zealand and Australia move to an easing bias in recent weeks, the Bank of England had provided further evidence that global central bank’s focus was shifting away from worries about rising inflationary pressures to concerns over growth.

“Inflation is yesterday’s story and UK growth is falling to pieces,” he said. “The pound is going to get absolutely thrashed.”

James Knightley at ING Financial Markets said he remained very downbeat on the UK’s prospects, with the consumer sector hit by rising unemployment, negative real wage growth and falling asset values, while the credit crunch and slowing profit growth was also hurting the corporate sector.

He said he expected the UK to enter a technical recession, which coupled with a downturn in commodity prices should act as a major drag on inflation.

“With wage pressures remaining benign, we see inflation significantly undershooting the Bank’s target late next year, which could pave the way for very aggressive policy easing,” said Mr Knightley.

“Our base case remains for rates to be cut to 3.5 per cent by the third quarter next year.”

The pound, which broke down through $1.90 against the dollar for the first time since November 2006 on Tuesday, fell further, dropping 0.9 per cent to $1.8780.

The pound also lost 0.8 per cent to £0.7927 against the euro and fell 1.1 per cent to Y204.87 against the yen.

Meanwhile, the dollar was little changed after hitting a six-month high against the euro on Tuesday as investors paused for breath after its recent sharp rally.

The dollar has risen more than 4 per cent against the euro since the beginning of last week amid a growing realisation that the US economy was not deteriorating as quickly as others across the globe.

However, analysts said after such a strong move, some consolidation was to be expected.

The dollar was little changed at $1.4899 against the euro, eased 0.2 per cent to Y109.03 against the yen but advanced 0.1 per cent to SFr1.0887 against the Swiss franc.

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八千代銀と東日本銀、初の四半期赤字に

　東京の地方銀行、八千代銀行と東日本銀行の2行は13日、2008年4―6月期連結決算が最終赤字に転落したと発表した。両行が四半期ベースの業績開示を始めた04年度以降、最終赤字は初めて。不動産や建設業などで取引先の経営悪化が相次ぎ、与信コストが大幅に増加した。両行は同日、9月中間期と09年 3月期決算の業績予想も下方修正した。

　八千代銀の最終赤字は6億円。9月中間期の最終損益予想は33億円の黒字から29億円の赤字に修正した。中間赤字は8年ぶり。同行の融資残高の約3分の 1を占める不動産業で経営悪化が相次ぎ、貸倒引当金を積み増した。09年3月期連結最終利益の予想も64億円から18億円に下方修正した。

　東日本銀の最終赤字は8億円。「7月以降に不動産業や建設業で取引先の経営悪化が続いた」（経営企画部）という。9月中間期と09年3月期の最終利益予想もそれぞれ11億円と53億円に下方修正した。

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海外への所得流出、年率換算で最大の28兆円に　4-6月ＧＤＰ

　4―6月期のＧＤＰ統計では、資源高などの影響で日本から海外への所得流出が続いていることも明らかになった。所得流出の規模を示す実質の「交易損失」は年率換算で約28兆円。1―3月期の約26兆円を上回り、現在のＧＤＰ統計を採用した1994年以降、過去最大の損失を記録した。

　製品の輸出価格が資源の輸入価格を相対的に上回れば、海外から日本への所得流入（交易利得）が発生する。交易損失はその逆で、日本は資源高や円高の影響で損失が拡大している。

　4―6月期は輸入価格が前年同期比9.9％上昇した一方、輸出価格が3.8％下落。交易条件が大幅に悪化し、所得流出の規模が拡大した。ＧＤＰに対する交易損失の比率は5％と過去最悪。先進国の中でも悪化の度合いが際立つ。

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１―６月の経常黒字、３年ぶり減　輸出が減速

　財務省が13日発表した2008年上半期（1―6月）の国際収支速報によると、海外とのモノやサービス、投資などの取引を示す経常収支の黒字額は10兆 4558億円となり、前年同期に比べ15.9％減少した。輸出が減速する一方で、輸入額が原油高の影響で膨らみ、貿易収支の黒字額が過去最少となったのが主因だ。半期ベースで黒字額が減少に転じたのは05年上半期以来、6期ぶり。

　貿易黒字は4期ぶりに減少。原油価格が前年同期比65.9％上昇したことなどから、輸入額が11.6％増加。過去最大の36兆3182億円となった。一方、輸出は40兆824億円。13期連続で増加となったものの、このところ2ケタ台が続いていた伸び率は4.4％にとどまった。

　旅行や輸送などの動向を示すサービス収支は1兆1123億円の赤字で、赤字幅は前年同期に比べ0.2％減少した。一方、企業が海外投資から受け取る利子や配当などを示す所得収支の黒字額は8兆5371億円となり、過去最大を記録。貿易より投資で稼ぐ構図が浮き彫りになった。

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4-6月実質ＧＤＰ、年率マイナス2.4％　１年ぶり減

　内閣府が13日発表した4―6月期の国内総生産（ＧＤＰ）速報値は、物価変動の影響を除いた実質で前期比0.6％減、年率換算で2.4％減となり1年（4四半期）ぶりのマイナス成長に転じた。資源・食料価格の高騰や米経済の減速が響いた。個人消費を中心に内需が落ち込み、輸出の減少で外需も振るわなかった。日本経済は景気後退局面に入った公算が大きく、当面は厳しい状態が続きそうだ。

　日経グループのＱＵＩＣＫが民間調査機関に聞いた「コンセンサス・マクロ」（経済予測）によると、実質成長率の平均予測は年率でマイナス2.3％。実績は事前の予測とほぼ同じだった。景気後退局面にあった2001年7―9月期（マイナス1.1％）以来の大幅なマイナス成長となった。

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邦銀、海外市場で存在感　協調融資でも大型案件

　大手邦銀は欧米金融機関への相次ぐ出資だけでなく、本業の融資でも世界的に存在感を高めている。欧米勢が貸し出しに慎重になった結果生じた信用収縮を、邦銀が一部「補完」しているといえる。

　調査会社のトムソン・ロイターによると、08年1―6月期の国際的な協調融資の組成額でメガ銀は6―8位に並び、10位以下だった前年から躍進した。米シティグループなどサブプライム問題で巨額損失を計上した欧米金融機関が軒並みシェアを落としたのとは対照的だ。

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三菱ＵＦＪ証券、印タタキャピタルと業務提携

　三菱ＵＦＪ証券はインドの大手金融会社、タタキャピタルと証券業務で提携する。三菱ＵＦＪ証券の顧客にタタ経由でインド株の売買を取り次ぐほか、Ｍ＆Ａ（合併・買収）など投資銀行業務でも協力する。人材交流も進める。タタはみずほ証券とすでに業務提携しており、幅広い日本の顧客開拓を狙い三菱ＵＦＪ証券とも提携する。

　三菱ＵＦＪ証券とタタキャピタルは13日に覚書を交わす予定。三菱ＵＦＪ証券はインド株業務に本格参入し、タタが出した銘柄分析リポートも活用する。共同でインド企業によるＭ＆Ａや資金調達を支援するほか、インド企業のＭ＆Ａを狙う日本企業にも助言をする。

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アーバンコーポ、民事再生法を申請　負債2558億円で08年最大

　東証１部上場の不動産会社、アーバンコーポレイションは13日、東京地裁に民事再生法の適用を申請し、同日受理されたと発表した。負債総額は2558億 3200万円で上場企業では今年最大。主に外資系ファンドから資金を調達して分譲マンションやオフィスビルを開発、転売するビジネスモデルで急成長したが、不動産市況の低迷で経営環境が悪化。信用力が低下し資金繰りが行き詰まった。

　同社は1990年5月に不動産仲介業を目的に設立し、その後、分譲マンション「アーバンビュー」シリーズで業容を拡大。オフィスビルや店舗、宅地など低収益の不動産資産を取得し、改修・改装して転売する「不動産流動化事業」で業績を急成長させた。

　2008年3月期は連結売上高で2437億円、経常利益617億円、純利益で311億円を確保したものの日本格付研究所（ＪＣＲ）が、アーバンコーポレイションが過去に発行した公募普通社債の格付けを「トリプルＢマイナス」から「ダブルＢプラス」に1段階格下げ。信用不安が広がり、経営が行き詰まった。

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７月の小規模企業の景況感、2000年以降で最悪に　商工会連合会

　全国商工会連合会が13日発表した7月の小規模企業景気動向調査によると、産業全体の業況ＤＩ（「好転」と回答した割合から「悪化」を引いた値）は前月より3.3ポイント悪化し、マイナス72.5となった。原材料高や米景気が減速しているためで、悪化は4カ月連続。米同時テロ発生後の景気後退などで 2001年12月に記録したマイナス70.8を下回り、さかのぼって比較できる2000年以降で最悪となった。

　業種別では、製造業など全4業種で悪化。小売業は1.4ポイント悪化のマイナス70.1。建設業も3.8ポイント悪化しマイナス92.4だった。

　調査は7月末に実施。全国約300の商工会の経営指導員にアンケート方式で聞いた。

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ガソリン２週ぶり値下がり、１リットル184.4円　0.7円安

　石油情報センターが13日発表した11日時点のレギュラーガソリンの給油所店頭価格（全国平均）は、前週比1リットルあたり0.7円安い184.4円となった。消費者の節約志向が進み、給油所の価格競争が激化したため。

　価格の低下は2週間ぶり。前週は8月に入って元売り各社が卸売価格を引き上げ、1987年に調査を開始して以来最高となる185.1円を記録した。ただ、夏休み中にもかかわらずガソリン需要が低迷しており、値下げを余儀なくされている給油所が増えているようだ。

　ハイオクは0.7円安い195.3円だった。

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通販大手、カタログ費削減急ぐ

　通販大手が商品を掲載したカタログの製作費用削減に取り組んでいる。千趣会は今月発行の秋冬号からインターネット注文主体の顧客へのカタログ送付を中止した。ニッセンも注文履歴をもとに顧客ごとに無駄なページを省いたカタログ作りを進めている。両社ともカタログ経由の販売が主力だが、印刷用紙の価格は過去1年で10―15％上昇しているため、見直しを決めた。

　千趣会は直近2年間にネットだけで注文した顧客へのカタログ送付を取りやめた。該当する送付先は会員全体の約7％に当たる50万件。印刷部数は200万冊程度減る見通し。送料などを含めたコスト削減効果は12月までの半年間で約5億円を見込む。

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三菱電機、発電機の生産能力２割増　新興国の電力需要に対応

　三菱電機は2008年度中に原子力や火力発電設備の中核機器である発電機の生産能力を約2割増強する。中国やロシアなどの新興国で電力需要が急増しているのに対応する。既存の設備を有効活用できる新たな生産方式を導入することで新規投資や人員増強を最小限に抑え、能力増強に要する期間を短縮する。

　現在、発電機を年間37台生産している電力システム製作所（神戸市）の能力を、今年度中に同45台に引き上げる。主にタービン発電機と呼ばれる大規模な原子力・火力発電所に使用する発電機を生産する予定だ。

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ロシア人スパイを書類送検、警視庁　日本国内で情報収集

　アジア系ロシア人の男が失そうした日本人になりすまし、30年以上日本国内でスパイ活動をしていたとされる事件で、警視庁公安部は13日、不正に旅券を取得したとして、男を旅券法違反容疑などで書類送検した。

　同部は1997年7月に男の逮捕状を取り、国際手配していた。男は95年に出国し、昨年6月には不正取得した旅券が失効。再入国の見込みがないことなどから、書類送検した。事実上の捜査終結で、不起訴処分になる見通しとみられる。

　同部によると、男は65年に福島県で失そうした歯科技工士の男性（当時34）になりすまし、東京都内の貿易会社に勤務、30年以上にわたり軍事、政治関連の情報を収集したという。家宅捜索で自宅から無線機や乱数表が押収されており、同部はロシア対外情報庁（ＳＶＲ＝旧ＫＧＢ）のスパイだったとみている。

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イリジウム窃盗、全面的に認める　千葉地裁で初公判

　千葉県市原市の検査会社から放射性同位元素イリジウム１９２が入った容器を盗んだとして、窃盗や放射線障害防止法違反などの罪に問われた、下請け会社元役員で無職磯智則被告（40）の初公判が13日、千葉地裁（樋上慎二裁判官）で開かれ、磯被告は罪状認否で起訴事実を全面的に認めた。

　起訴状によると、磯被告は4月5日未明、「非破壊検査株式会社」東京事業本部京葉事業部の保管庫からイリジウム入りの容器（130万円相当）を盗むなどした。

　磯被告は容器を2つに分解し、イリジウム１９２（長さ2ミリ、直径2ミリ）が入った内側の容器を横浜市内の川に、外側の容器を横浜港にそれぞれ捨てた。

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仏極右本部、財政難で売却…中国の大学へ、出直し図る

　財政難に苦しむフランスの極右政党、国民戦線（ＦＮ）はこのほどパリ郊外にある約５２００平方メートルの党本部を中国・上海の大学に売却する合意書に署名した。ルペン党首（８０）の話として週刊誌レクスプレス（電子版）などが１２日までに報じた。

　ＦＮは昨年の下院選で議席ゼロの惨敗を喫し、得票数に応じて額が決まる政党助成金や選挙資金への国庫補助が激減。負債は８００万ユーロ（約１３億円）を超え、銀行口座の凍結措置も受けていた。本部売却で借金を返済、出直しを図るが、党勢の衰えは著しく、前途は暗そうだ。

　ルペン氏は２００２年のフランス大統領選で決選投票に進み、国内外を驚かせたが、昨年の大統領選では右派色の強いサルコジ氏らに票を奪われ、第１回投票で敗れた。財政難に伴い、ルペン氏愛用の防弾仕様の乗用車が今春、インターネット競売で落札されたばかり。